Islamic State is now the largest, most dangerous, global terrorist organization of modern times.
It has the power to wreak more havoc than 9/11, bring down more governments than the Arab Spring, sabotage more foreign economies than the debt crisis, and drive more flight capital to U.S. markets than the crisis in Greece or the conflict in Ukraine.
But when we first began warning about the global threats it posed, most experts said we were crazy.
Pentagon strategists insisted Islamic State (formerly ISIS or ISIL) was strictly a local organization with no ability or ambition to attack the West.
Whitehouse policy wonks were so preoccupied with Obamacare, the NSA spying scandal, and mid-term elections, they barely noticed.
And Wall Street “experts” were so exuberant with one of the longest bull markets in memory, Islamic State wasn’t even on their radar.
Now, suddenly, Islamic State and its affiliates have burst onto the world scene with gale force.
Islamic State is creating chaos not only in Iraq and Syria, but also in Libya and Nigeria … not only in the Middle East and Africa, but also in Central Asia, Southeast Asia and even Europe … not only by deploying a propaganda machine aimed at lone-wolf copycats, but also by franchising its ideology, brand and tactics to pre-existing, well-established terrorist armies on three continents.
Slowly at first, but with growing momentum in recent months, the militant leaders of the largest or most radical Islamic terrorist groups in each country have come forward to formally vow their support or allegiance for Islamic State.
In the Philippines, Islamic State now has four separate terrorist organizations, including Abu Sayyaf, responsible for bombings, kidnappings, extortion, assassinations, rape, and child sexual assault since 1991.
In Pakistan, Islamic State’s affiliate is Jundullah with 12,000 to 20,000 fighters.
This is the group that was responsible for the deadliest attack on the Christian minority in the history of the country — church bombings that killed 127 people and injured over 250 in 2013.
And it’s also the same group that massacred at least 60 worshipers in a Shia mosque six weeks ago.
In India, Islamic State has Ansar al-Tawhid, which demands the overthrow of “Hindu supremacy.”
In Egypt, Islamic State’s affiliate is Jamaat Ansar Bayt al-Maqdis, the largest militant group operating in the Sinai Peninsula. It’s responsible for the bombing of gas pipelines from Egypt; multiple attacks on Eilat, Israel; the assassinations of top Egyptian officials; the beheading of alleged “spies” for Israel’s Mossad, and the murder of American citizens.
In Libya, Islamic State has three terrorist groups, including Islamic State of Libya, which, just last month, kidnapped 21 innocent fishermen from Egypt, marched them down a beach near Tripoli, and beheaded them on video — for the sole reason that they were Coptic Christians.
Islamic State also has affiliates in Algeria, Tunisia, Afghanistan, Indonesia, Somalia, Saudi Arabia, Yemen, and now …
The biggest and most brutal of all — Boko Haram in Nigeria, the organization best known for kidnapping, raping and selling into slavery 300 teenage school children in Nigeria last year.
Globally, Islamic State now has 34 terrorist affiliates, pledging their support or allegiance, adopting its unspeakably gruesome forms of violence, and seeking to create new “provinces” under the central leadership of its “caliph.”
All have joined forces in a black horde that controls or threatens massive territories, stretching from Central Asia to the Western Sahara — a mad, gory, rampage against any and all “disbelievers,” whether in their midst or in the West.
The Most Richly Funded
According to the U.S. State Department and Department of Homeland Security, Islamic State is the single best funded terrorist organization they’ve ever encountered.
Islamic State gets substantial donations from wealthy individuals and Islamic charities in the United Arab Emirates, Qatar, Saudi Arabia, Jordon and Europe.
Islamic State has made at least $1 million per day from illicit oil sales and another $20 million per year from the “business” of kidnapping for ransom and selling sex slaves.
Islamic State also profits from robbing banks, looting antiquities, stealing livestock, seizing crops, and hijacking truck shipments.
It now has anywhere from 31,000 to 100,000 jihadists on its payroll. And despite some moderate setbacks in Iraq and Syria, it’s continuing to grow by leaps and bounds.
Has this ever happened before?
Not to my knowledge.
Yes, Genghis Khan created history’s largest-ever contiguous empire with a series of Eurasian invasions and conquests that often came with wholesale massacres of civilian populations.
But that was in a different world in a distant era, many centuries ago.
Yes, history has periodically witnessed the rise of brutal dictators or the spread of violent revolutions. But the pace of those events was measured in terms of years or even decades. The advances of Islamic State are taking place over a matter of months, even weeks.
Never before in history have we seen a movement that’s so fast, so brutal, and so difficult to combat.
How can Islamic State be stopped?
According to Foreign Affairs, the strategies that effectively worked against al-Qaeda wouldn’t work against Islamic State.
Al-Qaeda never grew beyond isolated terrorist cells. Islamic State, in contrast, controls territory and, like the Taliban in Afghanistan, seeks to create a “pure” Sunni Islamist state governed by a brutal interpretation of sharia law.
Islamic State’s goal is to instantly “obliterate the political borders of the Middle East that were created by Western powers in the twentieth century; and to position itself as the sole political, religious, and military authority over all of the world’s Muslims.”
Also unlike al-Qaeda, which rarely operates in the open, Islamic State fighters and leaders cluster in urban areas, where they’re integrated into civilian populations, making drone strikes and raids much harder to carry out.
Perhaps most important, unlike al-Qaeda, killing Islamic State leaders does not cripple the organization. They’re shielded and backed up by a functioning pseudo-state with a complex administrative structure.
Yet, despite all these challenges …
Last Fall, the Obama Administration enlisted the participation or support of more than three dozen allies to bomb Islamic State strongholds in Iraq and Syria. And for the last six months, they’ve pursued these campaigns relentlessly.
But now, even after more than 1,000 bombing raids since September 23, they’ve accomplished little and gone nowhere (except for the few situations when they’ve had the cooperation of local ground troops).
Last month, Egypt joined the fray, bombing Islamic State positions in Libya. But again, they’ve barely dented the Islamic State’s advance.
Just last week, U.S. Secretary of Defense Ash Carter said Washington’s military campaign against Islamic State may extend to the terror group’s affiliates in countries such as Libya and Nigeria.
He recognized that this is a global war, that the U.S. must fight it in multiple countries and that it’s likely to get a lot larger before any semblance of closure can be expected.
What he and most Western authorities have failed to recognize is that, as we’ve seen repeatedly …
Any so-called “victories” merely plant
the seeds for the next major uprisings.
Just consider the recent history …
- On May 1, 2003, on board the USS Abraham Lincoln, President George Bush declared “mission accomplished” in Iraq. But that “victory” is what led to the emergence of the first-ever al-Qaeda affiliate in the country, something that never existed prior to the U.S. invasion.
- Eight years and seven months later, in Fort Bragg, President Barack Obama declared the end of the Iraq war. But it’s that so-called “end” which cleared the way for Islamic State, an organization that barely existed before the U.S. withdrawal.
- And just last week, “Iraqi forces” declared victory over the Islamic State forces in Tikrit, the hometown of Saddam Hussein. But they were Iraqi forces in name only. In reality, they were Shia militias known for their own brutality and massacres, led by Iranian commanders, known for their own terrorist attacks on the West.
Now, in the wake of these battlefield “successes” …
What new jihadist groups will join Islamic State?
What new civil wars will the allies be dragged into?
It’s abundantly evident that they cannot stand by and do nothing. But it’s equally clear that every time the Western powers dive into the conflict, they stir up a hornet’s nest of terrorism that spreads to the far corners of the planet.
This is a key reason why the global war on terror is ramping up rapidly, just as our Money and Markets editor Larry Edelson predicted a year and a half ago.
This is one of the big forces driving torrents of money from troubled regions of the world to the safest financial centers of the West, especially the United States.
This is another big factor behind the U.S. dollar’s unprecedented, seemingly unstoppable, surge against the euro and virtually every other currency in the world.
And this is why you should stay on course, investing almost exclusively in the highest quality, most stable, most liquid, most promising dollar-denominated assets you can find — or we can find for you.
Tomorrow, Jon Markman will give you some examples.
On Wednesday, Larry will explain more specifically how to protect yourself and profit.
And in the weeks ahead, we will continue to do everything in our power to warn you of the next battles, help protect you from the dangers and point you toward the most prudent profit opportunities.
Good luck and God bless!
Errata: In my Money and Markets column of one week ago, the following paragraph about nuclear war had some incorrect facts. It should have been: "I hasten to add, however, that a nuclear conflict is far less likely today than at any time since August 6 and August 9, 1945 … when Colonel Paul Tibbets and Major Charles W. Sweeney piloted the Enola Gay and Bockscar, when they loaded the first and last of two atomic bombs ever used in warfare, and when they dropped them on Hiroshima and Nagasaki, Japan."