The trade war is a sideshow… This ancient “power trap” is a much greater threat… In the mailbag: Is society losing the fight against socialism?

The U.S.-China trade war is a massive distraction…

You can’t turn on the TV… open a newspaper… or check the news online without being bombarded with trade war news between the U.S. and China.

The latest tidbit is that President Trump and President Xi of China will meet at Trump’s Mar-a-Lago resort in Florida later this month to sign a trade war truce.

No doubt there’ll be plenty of speculation in the press ahead of the summit… then official statements from both delegations to the media… then the usual photo ops.

But as Legacy Research cofounder Doug Casey has been telling readers, it’s all a distraction from what’s really going on between the world’s superpower and its closest military rival.

As you’ll learn in today’s dispatch… Doug believes the two powers are headed for a shooting war.

It’s the third big-picture call from Doug this week…

This week at The Daily Cut, we’ve focused on a series of crisis predictions Doug shared with readers of our elite Crisis Investing advisory.

It’s an advisory dedicated to finding “blood in the streets” opportunities to profit. And Doug and his globetrotting analyst Nick Giambruno see plenty of crisis opportunities dead ahead.

Out of consideration for Doug and Nick’s paid-up subscribers (who can catch up in full here) we won’t be going into detail on everything Doug sees coming down the pike.

But as we’ve been telling you, Doug sees two major threats on the horizon.

The first is the rise of socialism and why that means radically higher taxes for folks with money.

The second is a civil war in America between “Team Red” and “Team Blue” – aka Republicans and Democrats… left and right.

But not all the threats are from within the U.S.

Doug sees an overseas threat, too…

As he told Crisis Investing readers, the trade war with China could quickly be overshadowed by a shooting war.

In fact, Doug says a war between the U.S. and China “seems inevitable,” given the special set of circumstances the two nations find themselves in today. As he explained it…

When tensions build between states they eventually fight with each other. China is the major rising power. It’s got four times the U.S. population, it’s soon going to be more economically powerful, and it’s going to reach military parity. It’s also of a different culture than the U.S.

The U.S. government may figure it’s best to take China out while the balance is still in America’s favor. It’s like the situation with the USSR in the 1980s. The Kremlin could see the country was in decline, and some Soviet generals figured it was “now or never” for a successful war. Fortunately, the Soviet Union collapsed first.

We’re used to thinking about the Soviet Union as the “Evil Empire.” But don’t underestimate upstart China… or its rapidly growing power. Doug again…

The Chinese came from nothing; only 40 years ago, they had nothing but a billion impoverished peasants. No money. No technology. No power. Today, they’re on par with the U.S. But if this trend continues – which it will – their economy will be triple the size of the U.S. economy in 20 years.

And with that economic might comes military might.

It’s what foreign policy nerds call Thucydides’ trap…

Thucydides was a historian from ancient Athens, who wrote about the Peloponnesian War at the end of the fifth century B.C.

The war saw the upstart military power at the time, Athens, battle for supremacy with military superpower Sparta.

Thucydides argued that the war was inevitable because Sparta had to strike Athens while it still had the upper hand… or watch Athens eclipse it in terms of military strength.

As he wrote, “It was the rise of Athens and the fear that this instilled in Sparta that made war inevitable.”

Doug says the situation hasn’t gone unnoticed among America’s top military planners…

The U.S. military thinks a shooting war is inevitable. And it probably is. Five thousand years of history teaches us it’s better to start a war when you’re more powerful than your enemy rather than wait until they’re more powerful than you. It’s always been this way. The Golden Rule of statecraft is: Do unto others – but do it first. It’s a very dangerous situation.

How would such a conflict start? Doug again…

The U.S. may do something stupid, like fabricate an incident, and launch a preemptive strike against China. Or perhaps things just get out of control, as they did in World War I.

It would make about as much sense as the Peloponnesian War, or World War I. But these things can take on a life of their own.

Doug’s not making this prediction to scare you…

As he points out, the wars between European powers were bad enough.

And the war the U.S. waged against Japan was even uglier. It ended with the first nuclear incineration of a human civilian population in Hiroshima and Nagasaki.

The last thing anyone wants is a war between the world’s superpower and its closest rival.

But history shows us that, more often than not, that’s exactly what happens.

Over the past 500 years, there have been 16 cases where a dominant power faced off against an upcoming rival. And 12 of those cases ended in war.

That’s three in every four. So the odds of the U.S. and China butting heads militarily are as high as 75%.

We’re not predicting World War III…

Astute readers will be quick to point out that the biggest and most dangerous showdown in world history – the Cold War between the U.S. (the dominant power at the end of WWII) and the Soviet Union (the upstart rival) – never turned hot.

But the two sides gored each other in a series of grizzly proxy wars fought across Korea, Vietnam, and Afghanistan… to name only a few.

And the same thing is possible between the U.S. and China over the coming years.

That’s why you should hope for the best… but plan for the worst…

As Doug’s fellow cofounder here at Legacy Research, Bill Bonner, likes to put it, “Our ultimate goal is to put our readers on the right side of history.”

And to do that you need to consider the worst-case scenarios – whether it’s a radical rise in taxes on the wealthy… a civil war in the U.S… or a shooting war with China.

And you need to prepare for them before they happen.

That means…

Buy some gold… stash some cash… get your “bugout bag” ready

And, if you have the means, consider finding a secure “bolt hole” far from any potential conflict areas. In other words, a place you can escape to in the case of a crisis like the one Doug sees coming.

As we told you yesterday, Bill Bonner Letter coauthor Dan Denning drove thousands of miles across America last year to find the best places for a bolt-hole.

Here are the links again to the two reports he put together with what he found…

And he’ll be reporting back in these pages on the current overseas leg of his bolt-hole tour in New Zealand. So stay tuned for more from Dan in future dispatches.

In the mailbag: Is society losing the fight against socialism?

On Monday, Doug showed why America is becoming a full-fledged welfare state. And in today’s mailbag, a millennial Daily Cut reader reveals how socialist ideas are rampant in college culture…

I am right in the heart of the “millennial” generation and a college grad. I do believe more socialism and welfare state is inevitable, and I am against all of it. I do believe that free markets are the only true way that equality and prosperity is achieved, due to the ability to succeed and transcend one’s current socioeconomic status.

In school and college, there is a rampant overtone of the benefits of socialism and how the rich are getting richer, which is part of Tucker Carlson’s comment. Where he and I agree is that the reason the current situation exists is because of greed (for money and power) in politics/lobbying. However, the way to fix it is not to tax or create regulation…

Society is losing the fight, due to the teachings from young ages that the rich are out to get you and you should be entitled to things. Those are the seeds of thought that are poisoning us and the “answer” to socialist (collectivist) thinkers is that the government will fix it.

More government will do exactly what it has done in every location any form of collectivism has ever been employed. It breeds corruption and poverty/death, the most recent example being Venezuela. All collectivists such as AOC [Democratic Socialist rising star Alexandria Ocasio-Cortez] never address these issues or the history of examples of the fallout of more government.

– Kurran K.

Is the education system poisoning our youth, like Kurran says? Is more socialism inevitable in America? Share your thoughts with us at [email protected]. We read every email you send in.



Chris Lowe
March 6, 2019
Lisbon, Portugal