45. War
Most of the information that follows comes from two of Tom Belyeu’s podcasts titled “Impact Theory,” in which he interviewed Ray Dalio in late 2023 and in 2024, both available on YouTube. Ray Dalio is the founder of Bridgewater Associates.
Dalio argues that America is facing three risks to its standing in the world that threaten its collapse: (1) the creation of debt, (2) the expansion of the wealth gap, and (3) the risk of external war from China, Russia, and Iran.
He identifies five types of war:
Trade war
Technology war
Political influence war
Capital war (including sanctions and tariffs)
A shooting war
Dalio believes America is already engaged in the first four types of war. If sanctions fail due to the continuing debasement of our currency by the government, this will likely leave only one option: a shooting war. He states that Putin has already indicated Russia is fighting a proxy war with the U.S. in Ukraine. At 75 years old, Dalio estimates the likelihood of America entering a domestic civil war at 35%-40%, and an external shooting war at the same percentage, the highest in his lifetime.
It's important to note that three of Dalio’s “types of war” are economic: trade war, technology war, and capital war, which includes tariffs. A “political influence war” would likely include sanctions, which are also economic. Many of Dalio’s “wars” rely on economic strength to force behavioral changes, often aimed at containing violators' actions and preventing a shooting war. These economic wars, even when intended to avoid a shooting conflict, are destructive for both the aggressor and the victim nation, as they restrict or deny the exchange of goods and services, reducing economic welfare for both parties. Naturally, the country that initiates economic wars (trade, technology, or capital) often estimates that it will inflict more damage on the recipient than it will sustain itself.
“On July 21, 1861, civilians brought picnic baskets and opera glasses to watch the Union army march into battle at Bull Run. . . The battle turned chaotic when some soldiers panicked, resulting in a bloody defeat for the Union and sending the picnickers scrambling to safety.” [The Worst Picnic in History, by Elizabeth Nix, July 18, 2017] The aftermath of a shooting war left a fearful dread on both sides, and there would be no more picnics at battles during the Civil War. Presently, we are directly involved in a shooting war in the Middle East. Our bases have received multiple attacks, as have our naval vessels. We also have military personnel in Ukraine; although not directly involved in the fighting, we are training and supporting them monetarily and with intelligence. Casualties in Ukraine have surpassed one million dead and wounded in two years. With Iran, Hezbollah, Hamas, and the Houthis chanting “Death to America,” and Putin threatening to use nuclear weapons, are we taking these conflicts seriously? Will Iran remain quiet when it has launchable nuclear bombs in a few months?
On August 30, 2024, Israel reported that they found the bodies of six hostages murdered in a tunnel beneath the city of Rafah in Gaza. A propaganda statement was issued by Hamas regarding the deaths. Instead of expressing outrage against Hamas on Labor Day, September 4, 2024, the people of Israel turned their wrath on their own leader, Benjamin Netanyahu (Bibi), initiating worker strikes throughout Israel. Nevertheless, they remain united against the Islamic threat. Violent military wars have historically killed more innocent civilians than soldiers. Today, with the speed of global communications, the death of innocents in war has not changed; however, media connectivity has evolved into a constant barrage of coverage of civilian deaths, a phenomenon unprecedented in its scale. This constant media coverage leads many young people in the West to believe that civilian deaths are disproportionate to the crimes suffered by them.
Today, the United States is engaged in trade wars with China, Russia, Iran, and North Korea. We are in technology wars with China, Russia, and Iran. We are in a political influence war with Russia and China. We are involved in a sanctions and tariffs war with Russia, China, and Iran. Moreover, we are arming and thus participating as proxies in two shooting wars: one in Gaza and Lebanon, and the other in Ukraine and Russia.
“World War III is becoming more likely in the near term, and the U.S. is too weak to either prevent it, or should war come, to be confident of victory.” [Russell Meade, “US Shrugs as World War III Approaches,” WSJ, A-13, September 17, 2024] The news from abroad is chilling. Washington Post columnist David Ignatius reports from Kyiv that Ukraine is “bleeding out” as its weary soldiers struggle against numerically superior Russian forces. The New York Times reports that China is expanding and escalating violence in its campaign to drive Philippine forces from islands and shoals that Beijing illegitimately claims. Bloomberg reports that Washington officials fear Russia will assist Iran in achieving its nuclear ambitions.
These news stories come from “liberal” press outlets that are friendly to the Biden/Harris administration. “None of these stories connect the dots by analyzing the consequences of repeated American failures on widely separated fronts . . . now taking place.” [Meade] Reports from press sympathetic to the Biden/Harris administration underscore the magnitude of our military weakness.
The bipartisan report released by the “Commission on the National Defense Strategy” (NDS) in July 2024 concluded that “U.S. industrial production is grossly inadequate to provide the equipment, technology, and munitions needed today, let alone given the demands of great power conflicts.” [Chapter 7, p.51] The bipartisan report underscores the urgency, stating, “Additional resources will be necessary.” [Chapter 9, p.69]. The 2018 NDS Commission recommended increasing the base defense budget at an average rate of 3-5 percent above inflation. [Chapter 9, p.71] That recommendation was not implemented during the Biden administration.
“The loss of economic freedom precedes the loss of intellectual and political freedom. Whenever liberty, as we understand it, has been destroyed, it has almost always been done in the name of some new freedom promised to the people.” [Hayek, Road to Serfdom, p.173, para.3]
At the time of this writing, the U.S. is directly involved in two wars in the Middle East and in Europe. Soft war maneuvers such as sanctions, trade restrictions, and tariffs may seem prudent to Americans; however, over the last four years, they have polarized former allies. Saudi Arabia and India, to name two, have joined the BRICS, seeking to avoid the threat of our restrictions on their currencies. Additionally, during the Biden/Harris administration, our military capability has declined by over 20% after inflation, greatly restricting our ability to fulfill our obligations to our allies, while our national debt has grown by 29%.
The debt and our war postures must be mitigated and reduced if we want the dollar to continue as the world’s reserve currency.
Have a blessed week!
By Tony Christ