We Are Behaving Like a Silly People

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What’s really driving the hysterical response to the Helsinki summit.

The hysterical reactions to Donald Trump’s comments in Helsinki show how we are becoming what David Lean’s T.E. Lawrence called the Arabs: “a little people, a silly people.” The difference is, we are the richest, most powerful, freest people in the history of the world, yet like children we are obsessing over words rather than paying attention to meaningful deeds.

Words have consequences, Trump’s critics warn. But they forget to add that words mean something when they are linked to deeds. Here’s an example: “This is my last election . . . After my election I have more flexibility,” especially on “missile defense.” In 2012 Barack Obama was caught asking Dimitri Medvedev to pass this message along to Putin in regard to missile installations planned for Poland and the Czech Republic. True to his word, Obama halted the programs, earning kudos from Medvedev, who called it a “responsible approach,” and Putin, who called it “correct and brave.”  Continue reading

The World Is Creeping Toward De-Dollarization

The issue of when a global reserve currency begins or ends is not an exact science. There are no press releases announcing it, and neither are there big international conferences that end with the signing of treaties and a photo shoot. Nevertheless we can say with confidence that the reign of every world reserve currency has to come to and end at some point in time. During a changeover from one global currency to another, gold (and to a lesser extent silver) has always played a decisive role. Central banks and governments have long been aware that the dollar has a sell-by date as a reserve currency. But it has taken until now for the subject to be discussed openly. The fact that the issue has been on the radar of a powerful bank like JP Morgan for at least five years, should give one pause. Questions regarding the global reserve currency are not exactly discussed on CNBC every day. Most mainstream economists avoid the topic like the plague. The issue is too politically charged. However, that doesn’t make it any less important for investors to look for answers. On the contrary. The following questions need to be asked: What indications are there that the world is turning its back on the US dollar? And what are the clues that gold’s role could be strengthened in a new system? Continue reading

Putin’s Gamble: An End to NATO and Restoration of Russian Might

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This article first appeared on the Belfer Center for Science and International Affairs at the John F. Kennedy School of Government, Harvard University site.

In 1985, a Soviet leader came to power, leading one of the two superpowers in a bi-polar world, commanding a powerful military and leading a party mandated with changing the world.

Mikhail Gorbachev was also equipped with something far more powerful than the weapons in the Soviet arsenal—forecasts of the USSR’s future inability to compete with the United States in economic, technological and military terms. Gorbachev was convinced that the Soviet war economy and its priorities would constrain and exhaust its national capacity to compete successfully at the end of the 20th century—and that the internal system needed change for the USSR to sustain itself as a competitive, global power. Continue reading