Trillions of dollars of debts
will be restructured and millions of financially prudent savers will
lose large percentages of their real purchasing power at exactly the
wrong time in their lives. Again, the world will not end, but the social
fabric of the profligate nations will be stretched and in some cases
torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.

We will be updating the Cycle of War. Obviously, it is time once
again. Especially since that model also hit to the day 3 times in a row.

Since the 1980s, I’ve been studying the so-called “cycles of war” —
the natural rhythms that predispose societies to descend into chaos,
into hatred, into civil and even international war.

I’m certainly not the first person to examine these very distinctive
patterns in history. There have been many before me, notably, Raymond
Wheeler, who published the most authoritative chronicle of war ever,
covering a period of 2,600 years of data.

However, there are very few people who are willing to even discuss
the issue right now. And based on what I’m seeing, the implications
could be absolutely huge in 2013.

Where does this all lead us? The risk in your view is of another
Great Depression. But even respectable European politicians are talking
not just an economic depression but possibly even worse consequences
over the next decade or so. Bearing European history in mind, where does
this take us?

In the 1930s, because we made a major policy mistake, we went through
financial instability, defaults, currency devaluations, printing money,
capital controls, trade wars, populism, a bunch of radical, populist,
aggressive regimes coming to power from Germany to Italy to Spain to
Japan, and then we ended up with World War II.

Now I’m not predicting World War III but seriously, if there was a
global financial crisis after the first one, then we go into depression:
the political and social instability in Europe and other advanced
economies is going to become extremely severe. And that’s something we
have to worry about.

A continuation of bailouts in Europe could ultimately spark another world war, says international investor Jim Rogers.

***

“Add debt, the situation gets worse, and eventually it just collapses. Then everybody is looking for scapegoats. Politicians blame foreigners, and we’re in World War II or World War whatever.”

• “The
  next thing the government will do to distract the attention of the
  people on bad economic conditions is they’ll start a war somewhere.”
  

• “If the global economy doesn’t recover, usually people go to war.”
  

The last time there was a series of competitive devaluations … it ended in world war two.

Currency wars lead to trade wars, which often lead to hot wars. In
2009, Rickards participated in the Pentagon’s first-ever “financial” war
games. While expressing confidence in America’s ability to defeat any
other nation-state in battle, Rickards says the U.S. could get dragged
into “asymmetric warfare,” if currency wars lead to rising inflation and
global economic uncertainty.

Trade wars always lead to wars.

What happened to [Libya's] Mr. Gaddafi, many speculate the real
reason he was ousted was that he was planning an all-African currency
for conducting trade. The same thing happened to him that happened to
Saddam because the US doesn’t want any solid competing currency out
there vs the dollar. You know Gaddafi was talking about a gold dinar.

Is this the first time a revolutionary group has created a central
bank while it is still in the midst of fighting the entrenched political
power? It certainly seems to indicate how extraordinarily powerful
central bankers have become in our era.

Robert Wenzel of Economic Policy Journal thinks the central banking initiative reveals that foreign powers may have a strong influence over the rebels.

This suggests we have a bit more than a ragtag bunch of rebels
running around and that there are some pretty sophisticated influences.
“I have never before heard of a central bank being created in just a
matter of weeks out of a popular uprising,” Wenzel writes.

• The head of the World Trade Organization
  

• The head of the International Monetary Fund
  

• The head of the World Bank
  

• Leading economic historian Niall Ferguson
  

• Leading economist John Williams