Martin here with a quick update on three new Obama wars that could have a big impact on investment markets in the weeks ahead.
The president announced his first new war nine months ago.
He officially announced the second just last week.
And the third, still being fought mostly in the background, could burst into the headlines at almost any time.
Each of these is creating uncertainty, confusion and fear globally, driving massive amounts of flight capital to safe havens, leading to unprecedented dangers — and opportunities — for investors.
New Obama War #1
U.S. Bombs Syria
On Sept. 10, the president launched an aggressive campaign of airstrikes on the Islamic State in Syria (as well as neighboring Iraq).
The danger: It would play right into the hands of Syrian President Assad, who has used Russian-made planes to bomb his own people for four long years … who’s responsible for up to 200,000 deaths in the Syrian civil war … and who has dispersed millions more overseas. That’s what I warned about nine months ago. And that’s precisely what’s happened.
The second danger: Without boots on the ground, it would ultimately fail — just as we’ve begun to see in recent weeks.
New Obama War #2
U.S. vs. Islamic State in Iraq
This war became official just last Wednesday when the president revealed that he’s going to crawl back into Iraq with another 450 U.S. troops on the ground.
Then, the very next day, White House officials hinted about the real possibility of establishing a limited number of U.S. army bases in the thick of Iraqi battlefields.
You may think this is the same old Iraq War drama, Take 2. But as I’ll explain in a moment, it’s not. It’s a brand new war.
You might also think the immediate impact of America’s return to Iraq might be the subject of heated debate.
But the fact is everyone — including the president himself — admits that it’s an “incomplete strategy,” a token gesture, and, in effect, an exercise in futility.
Nor do you have to be a master military strategist to understand why. Join me on a quick trip through recent history and you’ll see exactly what I mean …
Iraq, mid-2000s. Tens of thousands of U.S. troops battle a relatively weak, splintered al-Qaeda in Iraq. The enemy holds no territory, has virtually no weapons, no money and little popular support. Yet, the U.S. is still unable to stop the nation from crumbling into civil war.
January, 2007. Almost 132,000 U.S. troops are on the ground in Iraq. But it’s still not enough to stop the country from coming unglued. So the decision is made to begin a great troop surge.
September, 2007. The troop surge hits its peak at 168,000. Sunni tribes join the battle against al-Qaeda and other extremists. The country is finally stabilized.
Now, fast-forward to today, and brace yourself for some very shocking facts:
Fact #1. Even after the deployment the president just announced yesterday, the U.S. will still have only 3,550 troops on the ground in Iraq — only half in a training role, none in a combat role. Back in 2007, the U.S. had nearly 50 times that many.
Fact #2. The enemy, previously made up of terrorist cells, is now a terrorist nation. It is hundreds of times stronger — in terms of combatants, weapons, funding, territory, organization and tacit popular acceptance or support.
Fact #3. No one — in the Iraqi government, among the various militias, or even with the allied air forces on thousands of bombing missions — has been able to stop the enemy’s advance.
Fact #4. The fall of Baghdad to the Islamic State is no less likely today than the fall of Saigon to the Vietcong and North Vietnamese regulars 40 years ago. Today, Saigon is Ho Chi Minh City. I dare not imagine what the future name of Baghdad might be.
Fact #5. The expansion of the Islamic State is already destabilizing the region and much of the world in unpredictable ways. America’s action — or lack of action — could set off a chain of events that disrupts, or even destroys, regimes from Asia to Europe.
New Obama War #3
Future War in Pakistan
Strangely, Pakistan has not been prominent on the radar screens of investors or news commentators. Yet, it embodies the largest, most populous — and potentially most explosive — mix of forces of any country on the planet.
In terms of land mass, it’s larger than Japan and Germany combined.
Its population is 44 million more than all of Russia’s, 64 million more than Japan’s and nearly triple that of France.
Its northwest region has been a safe haven for terrorists for 14 years.
And its nuclear weapons are a prime target for all three of the most dangerous groups in the world — the Taliban, al-Qaeda and the Islamic State.
The big threats:
Looming chaos …
The real possibility that this country will become a failed state …
And the inevitable next consequence — a free-for-all zone for extremists groups.
First, internal chaos. The Center for Strategic and International Studies (CSIS) puts it this way: “Pakistan’s social coherence is challenged by a number of trends and serious crises, including economic stagnation, an energy crisis, youth unemployment, ethnic and sectarian tensions, political violence, and natural disaster risks.”
Second, unemployment. In a recent survey, a whopping 75% of Pakistani households with family members that signed up to join militant groups said they did so because they were out of work.
Third, an acute and chronic energy crisis. In most communities, the government is not even able to consistently provide basic services like electricity. This alone has shaved billions off of GDP, creating more unemployment, more radicalism and more violence.
Fourth, proximity to the Afghan war. Decades of conflict in neighboring Afghanistan have helped funnel weapons and trained fighters into the country, while wealthy donors from Persian Gulf states have funded extremist groups and hard-line Islamists in every corner of the country.
Fifth, the rise of terrorist militants, mounting up to 2,000 attacks a year against religious groups, moderates, democrats and anyone exhibiting modern values.
Sixth, the politics of violence and coercion, especially in the country’s financial capital, Karachi.
Seventh, a major nuclear arsenal. Pakistan has more nuclear bombs than the UK, Israel or India. Only Russia, the U.S., China and France have stockpiled a larger number.
When and how will Obama get the U.S. involved?
He already has! Pakistan has been the theater for the Administration’s single largest drone war in the world — and will continue to be.
All with no plan to disengage, no talk of force withdrawals. Quite to the contrary, this behind-the-scenes, “quiet” war is showing every sign of blowing up.
There are more attacks by extremists groups in Pakistan than virtually any other nation outside of Syria and Iraq.
But as we’ve seen in both of those countries …
Widespread terrorism is the obvious precursor of civil war …
Civil war would threaten Pakistan’s nuclear arsenal …
And the threat to the nuclear arsenal would be an open invite for direct foreign intervention, especially by the U.S. and its allies.
These three new Obama wars can only mean that trillions of dollars in wealth will seek safety here in the United States.
Good luck and God bless!