The McAlvany Weekly Commentary
with David McAlvany and Kevin Orrick
“That’s the choice that’s coming. There will be a revolution. We will go either in the direction of the American Revolution or the French Revolution, which has always been called a Reign of Terror, and quite logically so. And I really think that’s going to be the choice we’re going to run into. And if we don’t revive what the early Americans knew, we’re going to go in the direction of the French Revolution.”
– Richard Maybury
Kevin: Our guest today is Richard Maybury. Reading his newsletter, Dave, for 25 years, I love the way he looks at life just a little bit differently. We all feel the elephant from our own perspective, but almost always, when I listen to Richard Maybury talk, he will bring up one or two points that I find myself repeating to other people to simplify a very complex situation.
David: Right. And there is no doubt, he comes from the vantage point of perhaps Libertarian isolationism, but he, with that, brings a unique perspective. Why are we doing what we are doing, where should we actually be spending money, as opposed to feeling compelled to do the things that we’re doing – running deficits that we are running. Are the commitments that we have made actually necessary, actually beneficial, or do they ultimately put our children’s children in harm’s way? They are all questions worthy of asking even if you might ask them or answer them from a different vantage point.
Kevin: Just a couple of weeks ago we celebrated Memorial Day. There are many people who have died for good things, there are many people who have died for questionable things, and I think one of the big questions that people have, whenever we see the United States involved in a war, or other countries, what is the war really about?
David: Around the dinner table, the things that we discuss are, one, notions of just war. Should we be there in the first place? And two, who do we value, not what do we value? Because we do value our troops, we do value the men and women who serve our country, even if we don’t value the policies which they are, in the line of duty and according to protocol because of a chain of command, required to be a part of. We value their courage, we value their willing sacrifice for our country, and we withhold judgment in terms of the policies which they may unknowingly be participating in. That’s certainly something that Richard has direct experience of, being a part of a special ops group in the 1960s, doing things that, in retrospect, he would of his own interaction and participation be critical of.
One of the things that I really appreciate about Richard is his focus on liberty, and I think one of the questions that surfaces over and over again when we get to Memorial Day as a family, is what was the most important conflict we were ever involved in as a country? And the answer, in our family is the conflict with the British in 1776. Had we not fought for that, everything else would be moot. It was a fight based on principles, it was based on an ideal of freedom, and it defined itself very differently than subsequent conflicts where you could say we’ve involved ourselves in various conflicts for opportunity or for some sense of our place in the world, which may or may not be justifiable. So the clearest cause, and the clearest point of gratefulness for us as a family goes back to the revolution. And it’s interesting, because that really is, if you dig deep with Richard, you find that liberty is something that is incredibly important to him.
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Richard, there are shifts constantly taking place in public policy, in international relations, and in business and investment opportunities. And I’m curious, as you survey all of the shifts currently taking place, which are the least obvious shifts, and which are the most concerning to you?
Richard: I would say the least obvious is one that I covered in the May issue of Early Warning Report, and it is the fact that Americans, and practically no one else, understands that what is going on in the world with all these wars that are breaking out all over the place, is what has been going on for probably three centuries or so. The Industrial Revolution broke out first in England and it spread to the U.S. and to the rest of Europe. And the government of England, the rest of Europe and the U.S. just went on a rampage around the world with these new weapons that the Industrial Revolution provided them with and they conquered almost the entire world. Only Japan, Thailand, Iran, Afghanistan, and parts of China escaped from this worldwide conquest. And what people don’t understand is that it’s still going on. In the United States, the native peoples that were conquered, which are the American Indians, got mostly wiped out, and the ones that were left were completely conquered. But that is not the case in the rest of the world. The native peoples in any given geographic area very often are still there, still fighting the governments, either directly, of the U.S. and Europe, or the puppet regimes that were established by Washington and the other governments and Europe. And I think practically every war in the world going on today, and there are more than 40 of them, that is what they are all about is these established regimes trying to keep control over the native people. And by the native people, the Sunnis, the Shi’ites, Islamic states – it’s just all over the world. When I was in the 605th Special Operations Squadron for the air force in the 1960s, we were in Guatemala, helping the Guatemalan government kill Mayan Indians. Those Indians were still fighting, the same way the Sioux and the Cheyenne and the Apaches were fighting the U.S. government back in the 1800s. The Mayan Indians were still fighting the Guatemalan government and Washington had put us in there to help subdue the Mayan Indians, and that is still the main thing that is going on around the world. It’s still the Indian wars on practically every continent, and that is what these wars are all about, at bottom. There are some exceptions, but that is the basic paradigm, or model, for the whole geopolitical system around the world right now. It is these countries that got the Industrial Revolution first are still trying to dominate the native peoples who didn’t get the Industrial Revolution first.
David: It’s a helpful contrast, a world full of imperial intentions, native peoples more or less minding their own business, and then the historical conflicts you would argue for the last several thousand years, where you have the Imperially minded trying to not only push the outer boundaries of influence and control, but also seeking resource aggregation, really at the expense of the folks who control those resources in the first place. I’m going to be in South Africa next month, and I appreciate your framing the issue that way because the conflict that you describe is between a “Roman Imperial” against native interests, sheds an interesting light on the Zulu and the Xhosa, and the conflicts that were taking place in the 1980s and 1990s around Apartheid. You have the vestiges of Cecil Rhodes showing up in the Apartheid regime. You also have the communist influences with the Southwest Africa People’s Organization, the ANC, and those organizations politically taking advantage of what was a natural inclination of the native peoples to fight and throw off what was an oppressive experience. I guess I’ve always seen more of the communist influence in that area as opposed to the communists taking advantage of something that was already there, latent, which is natural to just about everyone on the planet, a desire for freedom and peace on their own terms.
Richard: That’s a good point, bringing up the communists. When I was in Central America, at the orders of the U.S. government, helping kill these Indians, we were told that we were doing it to protect the people against communism. I was young, I didn’t know anything about geopolitics then, I believed it all. But over the years, I have studied what I had been involved in, and I’ve come to realize that the communists didn’t start these conflicts around the world, they just took advantage of them, as you say. The people, let’s say the Mayan Indians, needed help from someplace in order to fight off the Guatemalan government which had been established by the Spanish government, and the communists would just come in there and say, “Hey, we’ll help you out. You’ll be on our side against the Americans. We’ll give you guns and training and whatever else you need.” So it appeared to Washington and to most Americans that the communists were starting these wars, but they weren’t. The wars were pre-existing for probably a couple of centuries, maybe, and the communists just came in and took advantage of it. And that happened all over the world. That is what was going on in Vietnam and lots of other places. The communists didn’t start it, they just came in and took advantage of it.
David: You have, in the Middle East, a long history of outsiders meddling, and you make the case that much of the instability we see today in the Middle East comes from Franklin Roosevelt’s policies. Maybe you could expand on that, and I would ask, would you also include, along with Franklin Roosevelt’s policies, perhaps policies directed from London and Paris in the 19th and 20th centuries?
Richard: Absolutely, I would include them, no doubt about it. What happened is, in the 1940s the Saudi family, tribe, clan, whatever you want to call it, where still trying to consolidate their power over the rest of the tribes on the Arabian Peninsula. And Roosevelt contacted them and said, “How would you like a little help? If you will be on our side we’ll help you out, and you can go ahead and wipe out these other tribes if you want. We’ll give you the means to do it.” And the Saudi tribe said, “Yeah, that’s a great idea.” And I should point out, the British government was in there very heavily the same way, backing the Saudi clan and helping them wipe out the other tribes. So the Saudis did it. They took over almost all the Arabian Peninsula and changed the name from Arabia to Saudi Arabia. It was as if somebody named Jones had taken over Texas and renamed it Jones Texas. And that’s what Saudi Arabia is today, it is still that tribe trying to keep control of the Arabian Peninsula which contains all that oil, and I would say practically all of the conflict in the Mid East today extends from the British, French, and U.S. governments meddling in those nations’ affairs, which in the U.S. started in the 1940s. The British, French, and the Italians – those governments were in there a long time before that, doing the same thing. They would go in and they would pick a given tribe that they thought might be able to beat the other tribe, and they would make those guys an offer. “We’ll help you wipe out these other people if you will be on our side and do us favors.” And those tribes would accept, and the wars that you are seeing today are the descendants of those arrangements that were made in the early 20th century and 19th century.
David: Why do you think U.S. foreign policy has favored the Arabian Peninsula and the Saudis, over Iran and the Persians with a long and illustrious history? And do you think that is changing in any way?
Richard: It could be changing. I think Obama – far be it from me to say anything good about him, but you have to give the devil his due – he, I think, understood what we’re talking about here much better than almost any other president has and he was trying to point out that the U.S. has to back out of these crazy wars and bring our forces home. Well, I don’t think that’s going to last very long. He pretty much has been beaten down on that already. But the essential point is that the U.S. and the European government stay mixed up in those areas and I don’t see any end to it at all. I think it’s going to go on probably for the rest of this century. That’s one of the reasons that in the Early Warning Report I recommend defense stocks because I can’t see anything but big profits for the defense companies for the rest of this century because Washington keeps meddling in these other countries and U.S. politicians are so stupid about other countries. They treat everything like it’s a Hollywood movie, good guys against bad guys. And they can’t get it through their heads that in practically every case in the world where you find a war, it’s not good guys against bad guys, it’s bad guys against bad guys. And the U.S. just walks in there and takes sides. Sometimes they take both sides; they arm both sides, believe it or not. That is going on in Iraq right now; they armed both sides. It’s just absolutely ludicrous how simplistic their thinking is about other cultures.
David: The nature of warfare has changed from conventional to nonconventional over the last 20 years. Curiously, in the last three years you have ISIS, which has gained access to conventional weapons. What do you foresee as the battlegrounds of the next decade?
Richard: I don’t think there is going to be a particular battleground, I think that these wars are going to continue spreading. The main reason for that is technology. The cost of weapons is just falling precipitously. The day was that a machine gun cost a fortune, and only governments could buy machine guns. And now you can get the tools to make a machine gun at Sears, and actually make a good machine gun in your garage. It’s getting to the point where these native tribes that have been just beaten to a pulp for centuries are finally getting the weapons that enable them to shoot back in a very effective way. So, I think that these tribal conflicts which we are watching in the Middle East right now, that the fools in Washington just can’t stay out of, I think those types of conflicts are just going to keep breaking out all over the place. Africa probably is the one that is going to be the most bloody, I would guess, off the top of my head. But it will be a very common thing all over Asia and Africa, probably increase a lot in South America. It’s going to generally be the native tribes that have been trying so hard to get their land back for centuries are now going to be able to do it, and they will do it in a lot of cases.
David: Recently Al-Naimi, the Oil Minister in Saudi Arabia, was sacked, and I’m wondering what is the significance in a shift in key positions in Saudi Arabia? Now you have a young 30-something as the new Defense Minister, actually 29 years old. Can we assume that there is a shift in Saudi strategy and behavior? What does that look like?
Richard: There probably is. So much goes on in the world behind closed doors when it comes to government, and that is in the U.S. as well as everywhere else. The real decisions are ones that common people never hear about, and that is the same in Saudi Arabia; they are very secretive. You don’t know what is really going on. You don’t know what kinds of deal are being secretly made, or who is stabbing who in the back, and the situation is always very fluid. Now, where that is going to lead I don’t know, but I can be very confident that the Saudi leadership is scared to death. The hegemony that they have held over the Arabian Peninsula since the 1940s is coming apart, and there are organizations like Islamic State that are wanting to come in. And I think there is a sense of panic. I’m just guessing at this, I haven’t been in any of their secret meetings, but I’m just guessing that there is a sense of panic in Riyadh and I don’t know where that is going to go. You can predict, with some confidence, that there will be a lot more back-stabbing, there will be sudden removal in one way or another of various officials, but the direction it will all go in is really hard to say.
David: Radical Islam is not new. There have been various versions of intense belief in those who are purists of the faith going back eight centuries. So to what degree do you think our foreign policy has contributed to a modern day radicalization of Islam?
Richard: Tremendously. Again, those fools in Washington keep taking sides with people in these conflicts when they don’t understand anything about them. It is just such an outrage that these American politicians think they are so good and wise and noble that they can stick their noses into the business of other people on the other side of the world and straighten things out and make everything right. This is insane. Absolutely insane. But they continue doing it, and the so-called radical Islam movement is a reaction to that. As Ron Paul said so often, “They didn’t come over here until we went over there.” And that is a perfect summary of the rise of radical Islam. Some Muslim tribes were beaten down by other Muslim tribes that were backed by Washington and London and Paris, and it was inevitable that this day was going to come that those beaten down tribes were finally going to rise up, and they are doing that. The only rational thing for Washington to do is get out of there – just get out of there – bring the American armed forces home to create a fortress America and let the rest of the world go ahead and fight out these conflicts that they have had for centuries. There is nothing we can do about it except to stand back and wait for it to eventually be over, which will probably take the rest of the century.
David: Around the dinner table, growing up in our home, geography was a regular discussion, and the choke points, whether it be the Cape Horn, or the Straits of Malacca, or the Straits of Hormuz, these were commonly talked about. To become a fortress America, on the one hand has its merits. On the other hand, a place like the Straits of Malacca, 30% of global trade flows through there, and we currently have a conflict which is interesting, to say the least. Over the next three, to five, to seven years, you could have either the Chinese vying for complete dominance and control of the region, or we stand as a balance to their push outward. Again, it comes back to that thesis which you stated earlier, an imperial intention, whether it is of the United States, or of the Chinese, of having greater control of resources, trade routes, cities, tax bases, don’t we have a presence in Southeast Asia, specifically, the South China Sea, to act as a balance to what is a growing desire for dominance and regional control by the Chinese?
Richard: Yes. So the Chinese government is going to control it. Then what? All they can do is either cut off the rest of the world’s trade through that area, which would do them no good at all, or they can charge a high price, some sort of a tariff, for using that area, which is what they would probably do, just like the customs castles that you see all over Europe, the little castles along the rivers where the feudal lords would charge people money for going by that spot. And people would pay the money. That’s where the word customs comes from – the customary fee for passing that point – and if the guy raised the fee too high, people would stop using that river, and those businesses would fail and they would disappear. So the guy had to keep the tariff low enough that people would continue using the river. And that is what the Chinese would do with the Straits of Malacca. They would charge some fee for using it, just like the feudal lords in the Middle Ages. Well, okay, I would prefer not to pay that fee for a television set or computer or whatever I buy, but I most certainly don’t intend to go over there and risk my life fighting with the Chinese to try to keep the tariff from being levied. That is what we are really talking about. Do you really want to send your sons and daughters over there to die fighting to keep these tariffs down? I don’t think you probably do, but nobody ever presents it to the American people in that way. They don’t explain it. All they say is that we have interests over there. We have to protect our interests. And Americans go off and die to protect interests. And there is no legal definition for the word interest. Nobody knows what an interest is. All we know is that Washington expects us to die for it. This is insane.
David: So the Silk Road, or what is now being called the One Belt, One Road Project, which is expanding trade routes, trading oil, natural gas, goods, finished products, not only through Asia Minor, but also throughout the Sea Lanes all the way to Europe and India, your suggestion is, if they want to expand their business, let them expand their business. We don’t need a monopoly on global taxation as it relates to the flow of goods and services. That’s really not our role. It shouldn’t be our greatest aspiration. Let them have their slice of the pie. Is that fair?
Richard: I’m not saying I like that idea, but the reality is that you are either going to fight a war to keep those trade routes open, or you are going to pay the tax. It’s one or the other. And I don’t want to send anybody over there to die trying to keep the taxes down. Again, it’s insane.
David: In terms of politics here in the U.S., there appears to be a great degree of discontentment with establishment politics. As you look at this year’s political fracas, what are the issues that you see in play amongst the Democrats and Republicans?
Richard: Speaking realistically, I don’t know that there are any. I think that the Democrats and the Republicans are just two branches of the same party, and their main goal is to keep other parties from coming up, so I think those people are in bed together. And what looks like issues to the general public is just a show, and you can’t really know what these people disagree with each other about, but what you do know is what they do agree about is that one of them should be in power at any given time.
I don’t know, but I kind of suspect, that there are a lot of back room deals where they just trade off. “This year you’re going to get the legislature in Wyoming and we’ll get the legislature in Arizona, and you’ll get some judgeships here in Arkansas and Virginia, and we’ll get some in some other area.” I think that’s what really goes on and the money for the campaigns gets distributed accordingly. Again, I can’t prove that, but when you realize that the main goal of both of those parties is for both of those parties to keep control of the government and not let it go to anybody else, then there has to be a whole lot of back room deals that go on all the time. So I don’t think there are any real issues, I think it’s all just an act, all played out, and whoever wins the presidency is probably somebody that the two sides got together and decided, “Well, it’s your turn to have the presidency.”
David: If you step back from the two-parties and look at the personalities that are still in the mix, in choosing a president for the United States, what is more tolerable? A socialist, a communist, or a fascist?
Richard: Well, we have to get into definitions there on those three terms. One thing I would point out is that I think it would be a wonderful world if it was all communist in the sense that the word was originally to mean, which is, a world where we all love each other and we all work together and share the production and there is no government. That’s the key, there is no government. Well, there might be a few religious monasteries that practice communism, and maybe a few hippie communes here and there, but essentially, communism has never existed and it probably never will. What really has existed and does exist is socialism. And socialism assumes you should have this enormously powerful government that owns everything and everybody and decides where all the wealth will go and decides pretty much everything else, too, what job you’re going to do, and on and on. And the closer you get to that ideal socialism, the closer you get to some sort of tyranny. And that’s what is wrong in Europe right now is that they kept implementing more and more socialism until they pretty much duplicated what was going on in the Soviet Union. We all know what happened to the Soviet Union. Now, the other choice would be fascism. I tend to think that the fascist model is the one that is more strictly in existence everywhere. Fascism is extremely simple. It says that the truth is just a matter of opinion, therefore right or wrong are just matters of opinion. There we should do whatever appears necessary. No exceptions, no limits. That pretty much is the policy of every government on earth now, so if you’re worried about the isms, the one that already has control of everything is fascism. Myself, I believe in the system of liberty, and there are millions of other Americans who do believe in it, and I think it is slowly being rediscovered, but it is going to be a long process.
David: Is the erosion of confidence in the American political leadership – I think you see that in the more grassroots followings of a Bernie Sanders or a Donald Trump who prefer the “outsider” even if they’re not outsiders – is that symptomatic of a generational issue, or is there something more deeply systemic going on?
Richard: I think it’s deeply systemic. The American people are finally figuring out that the government is a big hoax. Now, they don’t want to face that, in so many words, but they are moving in that direction fast. They’re figuring it out fast. The government exists for the benefit of the government. They are figuring that out. And the popularity of Bernie Sanders and Donald Trump, who both are anti-government sales pitches, I think is due to that. The typical American doesn’t understand what you and I do about these things because he doesn’t study it all day long like we do, but he is slowly coming to see that the whole federal government is just a big swindle, and that, in my mind, almost certainly has to lead to some kind of a revolution, and I think some part of that revolution is going to be violent. That does not mean that there are going to be riots or gunfights in your backyard, but I would not want to live in the central part of Washington, D.C., for instance. I think that area is going to be a big mess sometime in the not too distant future.
David: Each time we come around to this political cycle, politicians promise the sun, moon and stars. Six, 12, 18, maybe even 24 months later, the electorate either has lost interest and doesn’t care that it was only empty rhetoric, or there are a few people that say, “We’ve been lied to yet again, and maybe that is the birth of this cynicism we see, and distrust we see for the Democrats and Republicans alike. I wonder if we don’t have, now, a very unique backdrop for disappointment, where whoever wins in November, in year two, or three, or four, we see a different kind of social and political volatility, because they thought that they were buying less of a swindle? As you say, maybe that is all we have on offer is swindle A, swindle B, swindle C. But they thought they were voting for the lesser of two evils, and yet, with great hope that it would be different this time, again, if there is something deeply systemic about, as you say, people seeing that government is a big hoax, aren’t we also setting ourselves up for even greater disappointment because we now have an electorate that has greater expectations coming into this election than they have had in past elections?
Richard: Yes, that’s a good point, and I think I wrote about that in the May issue again, or touched on it, at least. People voting for Sanders or Trump have hope. They think if their guy is elected that something important really is going to happen. You can’t dismiss the possibility, but I think the probability is practically microscopic. For one thing, the president is just one man, and the bureaucracy is millions, and the bureaucracy is not going to cooperate unless whatever the president proposes leads to more bureaucracy. That is the main goal of the government is to grow, to get the promotions and the pay raises that come from each bureaucracy getting bigger. And they are going to fight anything that might result in the shrinkage of the government. So, it’s a very unrealistic thing to have hope here, at least in this election. The day will come when the economy will just collapse like Europe’s is in the process of doing now, and then you will have a revolution and then you have a chance for a really definite, true change. But not now. The bureaucracy will stop it.
David: So number one, we have a transition on the horizon. Maybe 2017, 2018 could see economic and financial fireworks. Feel free to comment on that. But this notion that in the context of collapse we revert to the good and not the bad, I wonder if we didn’t have quite the opposite during the collapse in Germany. Not only were the Germans dealing with the consequences of the Treaty of Versailles, but then a spry, outspoken young firebrand of a leader stepped in and said, “I’m going to return us to greatness. We need to be great again.” And people responded to the rhetoric, and what ended up being a “salvation” for the German people was a nightmare for the world. What leads you to believe that when the ball hits it bounces in the right versus the wrong direction?
Richard: I don’t have any particular conviction that we’ll go in the right direction, and going in the direction of Nazi Germany is a definite possibility. What I’m saying is that the wise thing to do is to acknowledge that it is practically inevitable that there is going to be some sort of economic collapse and that will lead to a revolution, and so we should be planning right now to teach people the principles they need to have to go in the correct direction during the revolution, as happened in 1776. The American people had the right background in the system of liberty and they went in the right direction. When it was all over with, we wound up with, not a perfect country, but one that was probably the best, or one of the best, ever seen on earth. And if we can revive that heritage, the understanding that the typical American had, especially of the principles of the old British common law that the typical American understood back then, if we can revive that, then when the revolution comes, we have a good chance to go in the right direction.
David: So without building on the intellectual foundations of 1776, you may inevitably veer toward 1796.
Richard: Yes, that’s right. The French Revolution. I’m glad you brought that up. To me, that’s the choice that is coming. There will be a revolution, and we will go either in the direction of the American Revolution or the French Revolution, which has always been called the Reign of Terror, and quite logically so. And I really think that is going to be the choice we are going to run into, and if we don’t revive what the early Americans knew, we’re going to go in the direction of the French Revolution.
David: We’re out of time, and perhaps that is the wrong place to ask the question about velocity, but is not velocity, and an increase in velocity, an indication of people losing confidence in the currency of the realm?
Richard: Yes. Absolutely. Velocity is the speed at which money changes hands, and as velocity increases, that is a sign that they are losing confidence that the money will retain value.
David: Like playing a game of hot potato.
Richard: That is one of the indicators that I watch in Early Warning Report is velocity. I think there is a big jump in velocity coming and I am watching for it, and it could be the thing that triggers the big economic catastrophe that will lead to the revolution.
David: I would encourage everyone to get a copy of the last several issues of the Early Warning Report and this issue of velocity and the monetary hot potato is pretty critical. I think it’s very, very critical, because it is something that is a psychological shift, as much as a monetary and economic shift, where people desperately try to remove the risk from their portfolios by getting rid of things that they consider worthless and hope that the next person is happy to take them, and on and on the hot potato game goes. What is the best way for people to reach out to you, Mr. Maybury, to get a copy of your past reports?
Richard: Our 800 number is 800-509-5400.
David: Thanks so much for joining us in this enlightening conversation and perspective on where we are, and where we’re going, from the standpoint of geopolitics, domestic policy issues and the economy. We look forward to seeing how the years ahead of us unfold. We’re obviously interested and curious and hopefully well prepared.
Richard: Thanks a lot, David. It was really good talking with you.
David: Likewise. Great to have you back on the program, Richard.
