Editor's note: In yesterday's edition of our weekend Masters Series – taken from a recent interview on Porter Stansberry's weekly podcast, Stansberry Radio – legendary lecturer and financial analyst Richard Maybury discussed some of the biggest risks to America's monetary future.
In the second half of the interview with Porter and co-host Aaron Brabham, Richard talks about an eruption of global warfare we've been seeing for the last several years. At the heart of it, is what he calls "Chaostan" – an area that has been at war for centuries. Below, Richard shares his thoughts on the "chaos" in that region… America's involvement in the global war… and what it means for the future of our country.
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The Biggest Risk Affecting Our Monetary Future, Part II
By Stansberry Radio, co-hosts Porter Stansberry and Aaron Brabham
Porter Stansberry: I want to make sure we talk about the eruption of global warfare… this new type of war that we're seeing that you've been writing about as far as I know for at least 20 years and maybe longer.
You call it "Chaostan." I want you to explain the Chaostan hypothesis you have and where we are in that trend. But before we do that, I want to ask you a personal question. I'll understand if you're offended. But I ask out of the spirit of curiosity, and I don't mean at all to be rude or unkind. I'm just truly curious…
You're the only guy I know in this business – and I know most of the folks in the newsletter world now – that will not use a computer and that still uses a tape recorder as an answering machine. Is that a matter of personal choice, you just don't want to deal with having to keep up with the new technologies that come out every few years? Or is there is a deeper reason for that? Are you suspicious or are you concerned about your privacy?
Richard Maybury: I don't know where the thing came from about me not using a computer. I use a computer every day. But yeah, I am increasingly a technophobe – I guess that's the right word – because the stuff is getting more and more anti-user from the complexity. I'm 66 years old, and I don't want to spend the rest of my life studying tech manuals. And that's what I find myself doing. I had one of the very first Macintosh computers. It was a 128K Macintosh.
I was right on the leading edge of the tech revolution, and I loved it. But as time goes on, it's not intuitive anymore. It's just a whole lot of work to just be able to continue understanding how to run this stuff, and my life is too valuable for that. I'm not going to spend it studying tech manuals. And my essential objection to the whole technological world today is it just consumes my time like my time's not worth anything. And to me it's worth a lot.
Stansberry: I absolutely understand. I built a new mountain house up in Pennsylvania on top of a hill last year. And when we moved in, I literally could not make the thermostats work.
Maybury: Yes, right.
Stansberry: I literally could not make the thermostats work, so here I built this beautiful, expensive home, and I couldn't even get the air conditioning to come on. It was the middle of July. It was 90 degrees outside, and I'm cursing at the contractor over the phone. I said, "Listen, I want you to go to Home Depot. I want you to buy me the cheapest thermostat that they have, OK. I don't want it to have a battery. I just want it to plug in and just set the temperature."
Why do you need 30 zones of heating and cooling? Everybody in the house wants the same temperature.
Maybury: Yeah.
Stansberry: So anyway, I get your pain, and I think that's a great answer to my question. I appreciate you answering it. So let's move on to the piece of Westphalia and Chaostan. I don't think all of our listeners are familiar with your work in this area, so if you could give us a brief overview of where we've been and where we're going…
Maybury: OK. Chaostan is a term that I coined in 1992, I think, and it refers to the area – get a world map in your head here – from the Arctic Ocean to the Indian Ocean and Poland to the Pacific, plus North Africa, which is most of what we call Eurasia.
Stansberry: Sounds like the Boston bombers are from the heart of that area.
Maybury: Yeah, Chechnya, sure. That's right, the heart of it, that's true. The American Revolution taught the world a lesson that liberty is the thing that makes you rich, makes you prosperous, and not only free, but rich and prosperous and secure. And after the American Revolution, the whole world began drifting in that direction because the ordinary people wanted what the Americans had. They saw that it worked, that liberty works. It is a system, and it works. And it began to spread around the world.
But about 100 years later, along came the socialist revolution, and it killed off the spread of the system of liberty. And the area I call Chaostan is the area that never developed legal systems based on the principles that the American Revolution was fought over. So that area, Chaostan, never did achieve the kind of stability and peace and prosperity that the so-called free world did.
Stansberry: It's almost like they're still in a sort of escalated warlord tribalism stage.
Maybury: Yeah, that's exactly right. Americans don't realize that when you look at a map of the countries around the world, all of those borders that outline those countries, those lines were drawn by the European conquerors.
Stansberry: Right, courtesy of the Brits mostly after World War I.
Maybury: Right. The Europeans conquered practically the whole world except for five countries, and they drew the lines, the borders. Within those lines are numerous real countries where the people who live there share the same languages, the same religions, the same other cultural factors.
Stansberry: Yeah, emphasis on nations there instead of states, right?
Maybury: Yeah, I would say that. That's good, yes. And so, any so-called country you're looking at is actually an artificial construction created by the Europeans for the convenience of the Europeans. The people who actually live there do not usually feel any sort of loyalty to those so-called countries. They are not interested in those governments, and generally they hate their government.
Stansberry: Now, let me ask you about one possible exception. I'm sure I'm wrong, but the one exception that comes to mind to me is the Ottoman Empire. Wasn't the Ottoman Empire a modern nation-state in some ways? Didn't it have a unified code of laws, and wasn't it an integration of all those peoples?
Maybury: Yeah, to an extent. It was based on Islam, and Islam does promote or try to promote a sort of common law. It's somewhat similar to the British and American common law. And as the Muslim rulers spread across the areas that they conquered, they did spread that law along with it. And there was a sort of a legal unification of those places, but nevertheless, those places were drawn into the empire by force.
Stansberry: Right. I wouldn't describe it as a bastion of liberty.
Maybury: No, right. That's exactly right.
Stansberry: What, you don't agree with me? Off with your head.
Maybury: Right, right. But in those days, if you were living in that part of the world, the Ottoman Empire was one of the better places to live.
Stansberry: I have to admit, I started reading your stuff on Chaostan in 1996. I was much younger and much more naïve. And I thought you were completely out to lunch. I thought, "This guy has lost all touch with reality." I really didn't understand it, either. I didn't understand the foundations of it. I just saw you were predicting war and holocaust and tragedy. And I thought, "Well, you know, come on."
Maybury: Yeah.
Stansberry: Because in 1996, the Cold War was over. We were all supposed to be happy neighbors again, right?
Maybury: Right.
Stansberry: And of course, you have been exactly right about every single thing, so it only took me about five years to get with the program. But one thing I'm really good at is changing my mind.
Maybury: OK, good.
Stansberry: So now I'm on board with Team Chaostan. So where are we now, and what happens next?
Maybury: OK, well, for all of history, Chaostan has been this vast sea of blood and destruction. And that's why we keep getting these wars popping up there all the time. Just thinking of Turkey… As you know, in the last few days, Turkey has exploded, and I think that's just going to keep being the case all over that area. It started at the fall of the Russian Empire, the Soviet Empire. The Soviet government in Moscow sat on that area like a lid on a pressure cooker for about 75 years. And finally in the early '90s the lid blew off, and that area has just been in chaos ever since.
Stansberry: Safe to say you're not putting any of your new rearranged portfolio into Russian stocks.
Maybury: No, I'm not. Absolutely not. I'm too chicken for that. And it's just going to keep getting worse. And then we go to now the treaty of Westphalia… In the 1500s and 1600s, the governments in Europe realized that this war was really expensive.
It was getting in the way of doing the things they like to do, and they were kind of getting tired of it. They made an agreement – or several agreements. The first one is the treaty of Augsburg in 1555, and the other set of treaties was in Westphalia about 100 years later. And the two of them together today are just referred to as Westphalia.
What they did was agree with each other that nobody can attack anybody else unless there is a clear and present danger. You can't just go invade some other guy's country or attack some other guy without knowing that he is a danger to you, that he does have a clear and present intention to hurt you. Then you can attack, but you can't just go do it because you feel like it.
Now before that, the rule had been, all you need to go to war is to just assume that the other guy is up to no good and then you can attack him.
Stansberry: But wait, isn't that what the Bush Administration doctrine was?
Maybury: You got it. Now, what's been going on in the United States for the last 20 years or so is the dismantling of Westphalia.
Stansberry: Yeah, it's that we think that someday these people might develop the ability to hurt us, whether they have the intention of doing so or not. So we're going to go ahead and dictate to them...
Maybury: Yeah, exactly. You got it.
Stansberry: Well, that's just going to lead to eternal warfare.
Maybury: And that's what's going on.
Stansberry: But I think that Condoleezza Rice is way smarter than 400 years of human history.
Maybury: Well, I would disagree with that.
Stansberry: I'm, of course, being facetious. No, I remember when they promulgated this new idea. It was right after 9/11, and they said basically America has hegemony on force. Unless you do what we say, then we're going to destroy you.
Maybury: Mm-hmm. You're either with us or you're a terrorist.
Stansberry: Yeah. I'm not so sure that's going to work for us.
Maybury: Yeah, well, you're right, it's not. And that's where Washington is right now… they've got troops scattered all over the place, and especially lately in North Africa…
Stansberry: So you think that the deeper America gets into Chaostan, the worse these problems are going to be?
Maybury: Yeah.
Stansberry: For example, the Boston bombing. And as you know, with technology these days, it doesn't take much more than a really pissed off 19-year-old to start a lot of trouble.
Maybury: Mm-hmm, that's right. One of the many, many dumb things about Washington is they are unable to see things from another person's point of view. When they interfere in some other country, the people in that country have friends and relatives that are scattered all over the world. So you hurt somebody in some other country, you don't know where one of their friends or relatives are.
Stansberry: Right. Aaron and I learned this in high school. Neither one of us were bullies, but we saw the big tough guy would go pick on the little kid and bully him. Well, you know what… the little kid did some homework for some football players last week.
Maybury: Yes, right, right.
Stansberry: There's going to be hell to pay. Usually Aaron was the little kid, actually.
Aaron Brabham: That's true. That's true. I'm not poking hornets' nests, though. I'm not doing that.
Stansberry: Right, but you learn. But most people have the good sense to learn this in high school, right. You leave well enough alone because you don't want the blowback. Meanwhile, our supposedly wise leaders are just going around the world kicking hornet nests. And when Ron Paul brought this up in the Republican debates last election cycle, he got booed out of the building because he wasn't waving the flag. That's insane. If you care about the troops, if you care about the flag, you'd say, "Let's stop being stupid." But no, that's not gung-ho enough.
We have to charge into every rice paddy around the world and start fights with everyone we can.
Maybury: Yeah, I was really unhappy with The Wall Street Journal a few days ago. They ran an editorial by Bret Stephens. He was arguing that the U.S. has got to resist this temptation to just leave other people alone, and we've got to start meddling in these other countries more.
Stansberry: Yeah, well, we've got drones now, so we can do it.
Maybury: Yeah.
Stansberry: OK, Richard, listen, it's a great pleasure to talk to you. I love the common sense and the clear wisdom that you possess. It's really truly unusual. I have to say, it's also very unusual to talk to a newsletter writer who is as good verbally as they are at writing, and you really communicate very well. It's very impressive.
Maybury: Well, thank you. I used to be a teacher, so…
Stansberry: That helps. That definitely helps. And listen, a couple other things, I would really love it if my listeners would go out and buy your Uncle Eric series. And I tell people this with all honesty: If you want to educate your friends or your neighbors, particularly if you have kids in high school, this is the absolute perfect way to do it.
They're very clearly presented so that anyone could understand them. Where can you buy the whole series?
Maybury: Well, I can give you an 800 number, and we have a website. The website is richardmaybury.com, and my newsletter, which is called Early Warning Report, is available on there, as well as all of the Uncle Eric books, and the phone number is 800-509-5400. I certainly appreciate your kind remarks, Porter.
Stansberry: Well, I'll tell you one last thing, folks. When my sons – I've got two boys, five and two years old – when they get to be 14 or 15 years old, the thing that they will have to do before they leave home is read the Uncle Eric series. I think that's the foundation of a great education, and I don't just mean it's all about finance and economics and law, but it's just really clear thinking, and that is the rarest commodity of all. Richard, thanks for being with us, and I look forward to catching up with you again soon.
Maybury: You, too, Porter. Thank you very much.
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