Washington DC

“Quagmire” Is a Funny Word

By David Stockman  |  March 1, 2019

Nor did Madeleine Albright visit the absurdly misnamed ‘Demilitarized Zone,’ one of the most heavily militarized strips of land on earth. Across the waist of the Korean peninsula lies a wasteland, roughly following the 38th parallel, and packed with a titanic concentration of potential violence.

– Christopher Hitchens, Love, Poverty, and War: Journeys and Essays (2004)

It’s appropriate that the Tweeter-in-Chief left Vietnam without making a deal with his “friend” Kim Jong Un for North Korea to “de-nuclearize.”

That’s the perfect way to define the quagmire phase of the American Empire.

We’re still stuck on problems we created more than 70 years ago, trapped by “Cold War logic” that didn’t make much sense even then.

At the same time, neocons are escalating tensions in the Middle East. They won’t stop until they’ve brewed up the war with Iran they’ve wanted since 1979.

And the whole Duopoly is setting up for new interventions in South America, leading with Venezuela.

Meanwhile, the Powell Pivot means the Federal Reserve is no longer “normalizing” monetary policy.

The inability of our monetary central planners to do anything about the Main Street economy but appease Wall Street is the focus of the March issue of The Stockman LetterIt publishes today.

Appeasing Wall Street is, of course, critical to maintaining the status quo. The Fed is therefore merely an instrument of Imperial Washington.

So, we’re stuck abroad.

And Main Street is stuck with stagflation wrought be years of “extraordinary” measures that are now the way things are going to be…

“ZIRP” will have to be “NIRP”… The baseline for the Fed’s balance sheet is $3.6 trillion, but it’s “QE” all over again, to new extremes, once the next downturn happens… And it’s coming, soon…

Apart from fiscal incontinence, Imperial Washington is plagued by political dysfunction. And it has no idea the rest of the world is tiring of the self-proclaimed “Indispensable Nation.”

Indeed, “The rest of the world knows Pax Americana is over.”

The Donald should never have gone to Vietnam… not back when he suffered those “bone spurs” nor this week to meet with Kim Jong Un.

As Jacob Hornberger points out this morning, the U.S. is to blame for the “nuclear crisis” on the Korean Peninsula:

If the U.S. government had never committed that illegal act in the first place – that is, if it hadn’t intervened in the Korean War, it is a virtual certainty that North Korea would never have acquired nuclear weapons. That’s because the only reason it acquired nukes in the first place was to deter a U.S. regime-change operation against North Korea, especially one involving a U.S. invasion of the country. Since a nuking of South Korea would obviously interfere with a reunification of the country and even might radiate much of North Korea, North Korea would have had no incentive to acquire nuclear weapons but for the U.S. government’s illegal intervention and presence in South Korea.

North Korea’s acquisition of nuclear weapons is just another example of the long-term perverse consequences of national-security statism and its policy of foreign interventionism and what they have done to our nation and the world.

But there was never any real hope of a breakthrough in Hanoi. That’s because the Donald is no longer in charge of his own foreign policy.

He cut himself off when he announced his intent to withdraw troops from Syria. The Warfare State simply won’t have it.

As Tom Luongo notes, “Belligerent, threatening, cocky, obnoxious and ignorant only partially cover the depths to which Mike Pompeo, John Bolton and Trump himself have taken U.S. diplomacy.”

Even as he strays further and further away from his original commitments to “drain the Swamp” and put an end to Forever War, the Donald can’t help but do damage.

He is indeed the Great Disruptor…

The Shock Absorber You Need Right Now…

Desperate times call for common sense measures.

And these are desperate times… Markets are corrupted by monetary central planning. They’re confused. And the road back is going to be treacherous.

We’re looking at a major re-pricing for all financial assets. And thousand-point intraday or day-to-day swings are part of that equation. Those can be frightening… for “buy and hold” investors.

I have a different approach, one that combines strategy and tactics into a plan flexible enough for you to survive and thrive amid the coming chaos. It’s called “The Stockman Model.”

All we’re after is a little stability, perhaps a chance to pocket a windfall when opportunity presents…

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David Stockman

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David Stockman

David Stockman is the ultimate Washington insider turned iconoclast. He began his career in Washington as a young man and quickly rose through the ranks of the Republican Party to become the Director of the Office of Management and Budget under President Ronald Reagan. After leaving the White House, Stockman had a 20-year career on Wall Street.MORE FROM AUTHOR