Long time no see Doug Casey"s no nonsense comments on Trump"s "ideas" concerning Panama, Greenland and Canada.
It always brings a lot to the discussion to add a minimum of context to bold assertions and ideas. Here we discover that what's Trump is saying doesn't hold much water and that his policies are more randomly opportunistic than strategic.
"The longest path to victory or the noise before defeat?" Here defeat means the crash of the American Empire. In the end, Trump may bring a few sound ideas to the table drown in a flood of nonsensical gestures which instead of slowing down the downfall of the hegemon will accelerate the process. What a way to go: A firework instead of a whimper! But then again: Did we really wanted 4 years of Kamala Harris' technocracy running wild? It reminds me of an old rather difficult choice in old Japan when the two options were boiling and roasting!
International Man: President Trump has openly voiced his interest in having the US government take control of the Panama Canal.
He has even suggested that he wouldn’t rule out using military force to make it happen.
What is going on here?
Doug Casey: Panama, like most countries, is an artificial construct; it’s not part of the cosmic firmament. It came into being when it seceded from Colombia in 1903, midwifed by US intervention. That was a “good” secession, unlike that of the Donbas from the Ukraine in 2014 or the South from the Union in 1861, which everyone knows were “bad” secessions.
The US then bought the Zone (5 miles on either side of the proposed canal) from Panama for $10 million, which was 500,000 ounces of gold. That impresses me as a fair price, considering it was an undeveloped fever-ridden jungle at the time and that gold is worth nearly $1.5 billion today. Another $40 million (2,000,000 ounces) was paid to buy out the previous French developer. In those days the US still—sometimes—dealt with a measure of honor and propriety. Then, another $350 million (17.5 million ounces) was spent to build the canal itself.
It makes sense to think in terms of gold since that was money then. It was the largest US investment in history up to that time. Be that as it may, creating Panama enabled the US to build the canal—to the great advantage of all concerned.
Anyway, the canal now supposedly yields $3 billion (+/- 1,000,000 ounces) of profit on about $5 billion of gross receipts per year. It’s not a giant money machine in today’s context.
Panama has been de facto US territory and the Canal Zone de jure US territory, fair and square, from the get-go. Until Jimmy Carter “sold” the Zone to Panama in 1977 (for a token $1) because he felt it was the right thing to do. I disagree, but everybody’s got an opinion. Since then, the Panamanians have run the canal competently and greatly improved it.
Perhaps we should just forget about the legalisms. Central America has been under the thumb of the US since at least the days of William Walker, who nearly succeeded in singlehandedly conquering most of the region in the 1850’s. USMC Gen. Smedley Butler spent the best part of his career acting as an enforcer when Central American cuadillos got uppity. And, most recently, the US invaded Panama in 1989 to depose long-time CIA stooge Manuel Noriega, killing several thousand Panamanians as collateral damage.
One annoying element of the current kerfuffle is the way Trump keeps saying the Panamanians are “ripping off” the US. I’m unsure how he’s jumped to that conclusion since, thanks to the Jones Act, almost zero US-flagged ships exist to “rip off.” All ships pay the same prices for passage, regardless of nationality, except for US Naval vessels, which pay nothing. Apart from that, Canal fees have risen much less than inflation since Panama took over.
The big question here is to what degree one nation-state can repossess or conquer real estate that may belong to another. Revanchism has been a consistent casus belli throughout history. The Argentines with the Falklands. The Moslems and the Jews with Palestine. The Suez Crisis in 1956 when Egypt took that Canal away from the UK and France.
Should Mexico try to repossess the American Southwest, which the Americans conquered in 1848? Should France try to repossess the Louisiana Purchase because they think it was sold too cheaply? Should Russia take back Alaska for the same reason?
Does the nationality of an asset like the canal make any difference? Or is it important that it’s operated competently and peaceably? It was weak and stupid of Carter to have given the Zone to Panama. But it’s dishonorable and stupid of Trump to threaten a theft.
International Man: Trump has also taken significant steps toward Greenland, a strategically important Arctic territory.
Why is Trump so focused on Greenland?
Doug Casey: Governments love to use the word “strategic.” It’s a magic word. Everything is strategic when they want something.
The island is quite an anomaly, bigger than Alaska and California combined, but with only 47,000 people, 90% of whom are “real” natives. I understand there’s something of a race problem, though, despite the fact the natives are a large majority. The “real” natives apparently have an animus against those of European descent, even if they were born in Greenland. And even though it costs Copenhagen about $10,000 per person per year to maintain the place. It would appear Greenland is a $500 million annual drain on the Danish treasury.
Does Greenland have mineral wealth? Of course. But so does Alaska, with a vastly better climate, vastly more development, 500,000 people, and a cornucopia of all types of minerals. Fun fact: Mineral production is greatly overrated as a source of wealth.
As for “strategic” things, during the Afghanistan war, strategic thinkers thought “we” should take it over because someone said it had $3 trillion of minerals. Similar numbers are pulled out of thin air for Greenland, but they’re meaningless for a dozen different reasons. The theoretical value of minerals in the ground is meaningless. What counts is the cost and possible profitability—or not—of recovering them.
One thing they’re not considering is who now owns Greenland. It’s not the Danish government. My understanding is that the island is owned in common by the natives—not just the vast icefields but even the land under everyone’s house. It’s a very tribal and communal society. Washington is not likely to respect that.
Greenland should declare independence. This might incentivize the natives to deploy their asset in the most economic way. Perhaps becoming an Arctic version of the Caymans or Singapore, buttressed by some theoretically valuable real estate. Becoming part of the US would most likely turn them into welfare recipients, a colder version of Puerto Rico—a lose-lose for both parties.
International Man: Trump has also proposed making Canada the 51st state, even going as far as threatening to use “economic force” to achieve this.
What’s your take on this?
Doug Casey: The Donald has a quirky sense of humor, something I’ve always liked about him. Maybe he’s just letting loose his comic instincts. However, jesting about an Anschluss with other people’s property isn’t a clever negotiating technique. In today’s world, it’s very dangerous. Could it be grounds for removal under the 25th Amendment?
This calls to mind what Thucydides said in his tome on the Peloponnesian War. The Athenians decided to teach the island of Milos a lesson for not actively supporting them against the Spartans. They invaded and destroyed the city, justifying it by saying: “The powerful do what they wish, and the weak suffer what they must.” It’s not a good look or a good model for the US.
But would Canada be better off if it merged with the US?
The cultures of Canada and the US are very similar. The big difference lies in the nature of their governments. Both are poorly run, bankrupt, and far from their founding principles.
That said, it’s arguable Canada would gain tremendously. The country has a per capita GDP of only 2/3rds that of the US, and it’s much more highly taxed and regulated. Merging them would only create an even more dysfunctional and “diverse” US.
The best solution for Canada is to split up, starting with Quebec. It’s not just that the province is culturally French and alien to the rest of the country; it has long been an economic drain. In fact, all the provinces would do better, becoming independent countries. Alberta has made noises in that direction for years. Newfoundland only joined Canada in 1949 to become a large net welfare recipient and the butt of Newfie jokes. They climbed aboard a sinking ship when they should have manned a lifeboat.
The real problem is that Canada is much more left-leaning than the US. If, heaven forbid, Trump somehow merged the two countries, it would only guarantee that leftists would control the US forever after. It would be a disaster for the US.
International Man: The idea of merging the US, Canada, and Mexico was once dismissed as a nefarious globalist scheme to centralize power, erode US sovereignty, and pave the way for a global government.
Trump has rebranded this concept, and many who once opposed it are now cheering it on.
Is globalism wrapped in a MAGA package still globalism?
Doug Casey: Apart from the fact that the world would be better off with many more microstates, not just a few megastates (or MAGAstates), it’s further proof that Trump has no philosophical core, and the US government is “on tilt.” That’s said of an incompetent, out-of-control gambler who keeps doubling his bets in the hope of somehow breaking even. The US is irredeemably bankrupt, controlled by an entrenched and deeply corrupt Deep State which operates for its own benefit, not the country as a whole.
I’m afraid the US is like a star about to go supernova, in collapse after burning its fuel. Or a dinosaur thrashing around in its death throes. It’s become a bankrupt multicultural domestic empire. Contrary to what Trump seems to think, it can’t solve its problems by expanding and taking over more territory.
That will only create more chaos.
International Man: What are the overall investment implications of Trump’s geopolitical strategy?
Doug Casey: We’re in for tough times. But, as always, I like to look at the bright side… namely that Harris and the Jacobins aren’t returning to office next week. On the dark side, Trump is starting to prove himself a megalomaniac. A bull in a China shop. A loose cannon. But, going back to the bright side, maybe this will have the effect of delegitimizing the US government, which is rotten to its core.
The average American has forgotten that his real enemy aren’t some motley foreigners on the other side of the globe—it’s his own government.
If Trump breaks some Deep State rice bowls, that’s great. I wish him, via Elon and Vivek, great success. Although success is a longshot bet. But what if Trump goes megalomaniacally wild and creates international chaos—in addition to what he may do in the Middle East or the Ukraine?
Washing away rotten foundations is both good and necessary. The problem is that a sound replacement foundation doesn’t exist on which to rebuild things because the basics of American society have been washed away as well.
I think we’re looking at potential chaos over the next four years, and then, when the Republicans are kicked out of office, it will get even worse. Truly rabid Democrats will take power as “our democracy” begs for a new father figure or Big Brother to kiss the situation and make it better.
So, as Lenin said, “What is to be done?”
With grossly overpriced stock, bond, and real estate markets, and a fiat currency heading towards its intrinsic value, it makes sense to own gold, silver, other underpriced commodities, and, of course, some speculations in the companies that produce them.
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