The similarity of today’s geopolitical dynamics and those of the 1970s is starting to get the attention it deserves.
Some of the parallels are obvious. The front page of Monday’s Wall Street Journal had an article titled, “An Arc of Instability Unseen Since the 70s.”
It compares the convergence of global crises then, when the Soviets invaded Afghanistan and the Iranian revolution brought the Ayatollahs to power, to today’s civil wars in Iraq and Syria, the Israeli and Palestinian strife and the turmoil in Ukraine.
The article doesn’t draw any explicit parallels between the U.S. presidents of the respective periods, but the widespread view that Jimmy Carter was simply inept is also the growing conclusion of many Obama critics today.
And while the warring between Israel and Palestinians is not unlike what it was in the 1970s, it also can’t escape notice that today’s wars in Libya and Iraq are being waged by jihadists with American arms. That should stir old memories.
|Today’s wars in Libya and Iraq should stir old memories.|
In 1979, Carter chose a wrong-headed interventionist response to the Soviet incursion into Afghanistan. Carter’s secretary of state, Zbigniew Brzezinski, had the U.S. funding and arming the mujahedeen, the Islamist resistance in Afghanistan. It was a policy that nurtured Osama bin Laden, who joined the mujahedeen cause in 1979.
And it can’t be overlooked that it was U.S. interventionism in Iran, when the CIA secretly toppled the Mossadegh government in a 1953 coup, that led to bilateral U.S.-Iranian hostility that continues today.
How different have the political machinations of the U.S. in Ukraine been? The U.S. spent $5 billion on clandestine subversion in Ukraine that climaxed in the coup there earlier this year.
Now, in an uncanny policy déjà vu, Brzezinski wants the U.S. to send anti-tank weapons and hand-held rockets to Kiev to foment the fighting in another conflict on Russia’s border.
What is it about half-a-world away that these interventionists don’t understand?
For us as investors, there is something else that happened in the 1970s that should be part of our pattern recognition. It went unmentioned in the Wall Street Journal article, but in 1979 the price of gold, which had already been climbing for several years, suddenly skyrocketed, fueled by the powerful propellants of global conflict and the Federal Reserve’s loose money.
It’s the same combustible mix we have today.
History may not repeat itself, but it rhymes.
P.S. I’m filling in for Laura Ingraham on her national talk show this morning. It’s one of the biggest talk shows in the nation.
It’ll be three hours of Freedom and Prosperity radio with provocative conversation and some outspoken guests including Ron Paul (of course!), former Reagan Budget Director David Stockman, “America’s Toughest Sheriff” Joe Arpaio on the border crisis, and others.
In most markets The Laura Ingraham Show airs 9 AM – 12 N ET; 6 AM – 9 AM PT.
To find Laura’s home station in your market, go HERE.