Thursday, October 09, 2014

How Inflation Explains Violence in the Middle East

If you dare to spend the few calories of energy it takes, the average person can increase their understanding of inflation (and thus economics) once they understand the concept of "flooding" a market with money.  Once you comprehend that money has no value and if you shovel a ton of it into a "market" with a finite amount of goods it only results inflation (not production), you've promoted yourself above nearly 95% of the population in terms of economic knowledge.

However, while most economic focus is on money and the markets it inflates, there are other forms of "currency" that have similar bubbly (and disastrous) effects on various countries and populations.  And military support is one such example.

We (at least here on Cappy Cap) all know the effects of flooding a market with money.  The stock market is overvalued by about 60% because of mindless-zombie-retirement dollars and QE money seeping in through buy backs and institutional investors.  College tuition, also a bubble, has increased in lock step with government grants, scholarships, student loans, 529 plans and all the other sources of financing the sheeple use to pay for increasingly worthless degrees.  The housing and Dotcom bubbles the same.  Investors, banks, lenders and borrowers all flooded that market.  But take that exact same concept of individual dollars flooding a market and replace it with guns, weaponry, and military support.

And now you can see the "bubble" that exists in the middle East.

Between the US, China, and Russia (and for various political reasons) the Mid East has been flooded with a ton of weapons and military wares for decades.  Add to that mix a religion where a significant percentage of its followers is radicalized.  Also add to the mix that two general sects within the group loathe each other.  And in the end you have a region full of wars, violence, murder, mayhem, etc.  However, ask yourself the question, would it be as bad had the powers that be just not involved themselves in the first place?

This is not a criticism of guns or various countries' policies in the Mid East, but merely an economic observation that the EXACT same thing that is happening in the college bubble or stock market is also happening in the Mid East through ISIS, Iraq, Syria, Israel, etc.  Just instead of inflation and higher prices being the unit of measurement by which people suffer, that unit of measurement is instead death.

The mathematical/economic solution is a simple one - simply stop supplying the area with guns and weapons.  ISIS would not have existed without US support and training, not to mention all the fine equipment and military grade hardware we left in the Iraqi's hands for them to take.  Lord knows how many people would have been saved had Russia not flooded the region with AK 47's.  And over time these weapons would wear out to the point of uselessness, and they would forced to resort to poorer and inferior weapons with less killing capabilities.  You would not so much get peace in the Mid East, but deaths would go down and maybe a modicum of safety and stability would ensue.

Alas, something tells me the ego of raging Shiite and Sunni are very much like the egos out of suburbanite teenage masses who view college as their birthright.  And sadly, the pushers of both weapons and worthless college degrees are more than happy to provide the supply.

Oh well, Enjoy the Decline!


Anonymous said...

The US has "interests" in the region that it needs to "defend".

Dave said...

If you print too much money, its value drops to zero. Same thing if you award too many diplomas. If you make too many people, their marginal value is less than zero. Don't say, "but people create wealth too!", because Egypt (average IQ 83) is not Silicon Valley and never will be.

The Middle East is a vast patchwork of tribes competing to make the most babies. All its complex, ever-shifting factions of blood, faith, and ideology (including "democracy") are just a game of musical chairs to decide who eats and who dies.

sth_txs said...

I can't disagree with much of what you said, but I truly believe that Bush II and the others in both parties who supported the Iraq invasion in '03 are traitors and not Americans. Americans who supported the invasion are fools as well.

Saddam was 'our boy' and much suffering on both sides along with economic destruction could have been saved by finding some other compromise. Especially since Iraq had nothing to do with 9/11.

Glen Filthie said...

Yes and no, Cap. Some random thoughts:

- I saw on some documentary where the Packistannies are knocking out homebuilt AK47's with ordinary rudimentary hand and power tools. They are accurate enough to hit a man in the chest at 100 yards. Good enough! Second: If we don't supply that market somebody else will.

- the liberal gun grabbers up here in Canada are filling their panties with fright: 3D printers and commonly available CNC machines can crank out AR15 parts faster than it takes for us to talk about it.

- the ethics and morals of disarmament for them is the same as it is for us only worse: is it moral to disarm men defending their families from a feral gov't? Or from some religious sect of barbarians and cavemen?

- my personal view is to write the moslems off wholesale. If they want to kill each other wholesale we should sell them all the guns they want - but hold back on advanced armament so that we can handle them if they try to turn those guns on us. Islam is a blight on the modern man and has no place in today's world.

Anonymous said...

Did it ever occured to you that maybe the powers that be prefer it that way ?

By having them all fight against each other, they are not uniting into a monolithic, powerful and wealthy petroleum rich modern state political bloc.

There is the European Union, some talk about the American Union.

The last thing that the powers that be want is an Arabic Union.

They are fighting ISIS like they are fighting forest fires in California. They are doing just the bare minimum to contain the threat without killing it.

Dan said...

It is supply and demand - there is a demand for weapons, and it is likely someone is going to meet that demand. It isn't like ISIS is going to say "we've out of gun barrels I guess we should just sit around". Weapons aren't that hard to make either, you basically just need to be able to cut metal. Frankly I think they would fight with swords if they had to. Plus, it is in the US interest to sell our excess weapons as long as we get paid.

Anonymous said...

It's great that the US government did all this for the sake of bringing "democracy and stability" unto troubled lands.
Who knows what would have happened if they had some kind of nefarious purpose? (sarcasm)

CA3 said...

Well, that's common sense Cap'n. Looney Tunes cartoons introduced that to me as a kid as supply and demand. As I grew up, I came to better understand that too much of any one thing, even something perceived as an overall good, can become bad for it's market value.

The First Joe said...

Your idea holds up for the more sophisticated weaponry - guided missiles, modern armoured vehicles etc. but not for basic unguided rockets, IEDs and guns.... Someone upthread already mentioned the gunsmiths of the Pashtun (border of Pakistan and Afghan). There are blacksmiths in West Africa knocking out huge numbers of simple, functional guns, and at the other end of the scale what has become a very sophisticated indigenous gun manufacturing industry in the Philipines (so much so, some makers there have gone semi-legit). Brazil's massive murder toll is in significant part due to improvised guns created by/for gangs. Dissident groups in Yemen have been building rotary 12 gauge shotguns. Google "improvised guns" - this stuff is everywhere. And let's not forget, the Hutu managed an entire genocide in Rwanda - almost entirely with machetes.

Anonymous said...


That something has a low or no market value isn't necessarily bad in it's own right.

If scarcity and high market value is so good, would you advocate for oxygen scarcity and forcing people to pay in order to breathe ?

People with no money can suffocate ?

Anonymous said...

Guns don't cause violence, people do.