"The world will know the war on terror is over when terrorism goes the way of piracy and slavery – it will become so socially unacceptable, terrorists will find no safe havens in the world. The terrorists' failure will not be a single big event, but it will be seen as they become weaker and weaker, as they have fewer and fewer recruits, as they have less and less money."
– Donald Rumsfeld, Sept. 8, 2004
I'm not a politician, so I have the luxury of taking a more direct path toward the goal of stamping out terrorism. But I'll save my most radical suggestion for the end of today's column.
First, what's up with all of the recent U.S. dollar strength? Did our massive debt and deficits drop while I was on vacation? Did oil prices fall back by double-digits?
No, No, and No! Despite what the "official" government inflation numbers say, all signs indicate there's a growing concern that inflation is either here now, or coming back very soon. Here's why:
- The U.S. dollar is strengthening against the euro.
- Gold has started rising in relation to the euro, yen and other currencies – a sure sign of the next stage of gold and silver's bull market.
The world is well aware that Americans have accumulated over $100 trillion dollars of debt. Walter Williams (economist) filling in for Rush Limbaugh recently, said one day we will just "repudiate" the debt. He's right! The question is: What will you be holding when it happens?
If a portion of your money is in gold – odds are very good you'll survive, perhaps even prosper. But if your money is 100 percent in paper related assets, you may not only be very unhappy, but perhaps broke as well.
In a recent interview with Bill Murphy, founder of the Gold Anti-Trust Action Committee, Murphy explains why gold should be $750 and silver $15 an ounce – nearly twice current prices – if major bullion banks would finally stop their market manipulation!
In my mind, the handwriting is on the wall. Government and corporate America can't keep the lid on this "frothy" consumerism-based-on-debt bubble forever.
Last year, the euro's strength took some of the pressure off the dollar, but with the European Union having a hard time agreeing to a constitution, that won't be the case in 2005. Now it appears the Saudis are buying gold, instead of euros, with both fists.
Middle Eastern investors who fled U.S. dollars for euros are now leaving euros. For what? According to economist Doug Casey, he suspects gold. "Saudi Arabian gold consumption grew by 10 percent to 37.3 tons in the first three months of 2005 compared with the same period a year ago."
Casey sees gold at $500 by year's end as people look for "real" places to put their money. Record high auction prices for U.S. rare coins support such theories.
The Saudis are pumping oil they sold for $10 just seven years ago, today for $58 plus. They're getting richer and putting the money – not in Euros, not in U.S. dollars, but instead into gold. They may be slimy, but they ain't stupid!
Remember, the world of Islam hates the United States and would love to see our currency fail. That explains why we no longer have the cooperation of the Saudis in supporting the U.S. dollar. They will continue to keep upward pressure on oil.
Let's face facts: What have the Saudis done to lower the price of oil? ZERO! And why would they, when we're stupid enough to cuddle their buddies at Gitmo with three squares (orange-glazed chicken, along with rice pilaf, pita bread, tea and fruit desserts – seriously!). And it's called a "gulag" by Amnesty International for doing so?
Two plans to end terrorism quickly!
America could end the war on terror quickly – and do it successfully if we took a page from the book of the "Greatest Generation" that fought and won World War II. Terrorists must pay a price or they will never stop. If they won't stop, they should be eliminated, just like we eliminated the Japanese and German leadership.
Plan A: Give the terrorists one week to stop the violent attacks on innocent Iraqis and the men, women and children around the world who have been targets of Islamic terrorism. This would allow innocent people the ability to get out of harm's way. If the terrorism persists, we destroy their "holiest" city, Mecca. If the violence continues, next is Medina, then Damascus, Tehran, etc., until the terrorism stops.
Sound crazy? Ask the Japanese. Critics say such a plan would only serve to galvanize the Islamic world against us. Great! Then we could identify the enemy and declare an official war against them, forcing them to either surrender or be eliminated! Keep in mind, this option worked for Harry Truman during World War II.
Plan B: Cut off the financial support of terrorism by U.S. and foreign corporations – by divesting of all companies doing business with the enemy. No one can argue with this strategy!
Plan A will likely never happen, so I suggest Plan B in the meantime. Let's fight terrorism with an economic endgame strategy that has the potential to decisively win this war.