The Logic Of War

Authored by James Rickards via The Daily Reckoning,

This was the week that the logic of war collided with the illogic of bubbles. So far, the bubble is winning, but that’s about to change.

The “logic of war” is an English translation of a French phrase, la logique de la guerre, which refers to the dynamic of how wars begin despite the fact that the war itself will be horrendous, counterproductive, and possibly end in complete defeat.

As applied to North Korea, the U.S. has made it clear that if it is forced into a preemptive attack to destroy North Korea’s nuclear weapons and missile programs, it will not stop there. The U.S. will aim to decapitate the regime and replace it with something more reasonable.

This could be the start of a gradual reunification of the Korean peninsula on terms favorable to the U.S. In effect, we would be winners in the original Korean War fought from 1950 to 1953.

North Korea has made it equally clear that any attack by the U.S. will result in massive artillery and missile bombardment of South Korea, and possibly Japan and U.S. bases in the region.

Even if North Korea has not yet produced nuclear armed missiles, it does have enormous conventional firepower and missiles. It could possibly detonate a nuclear “device” even if it does not yet have a miniaturized nuclear warhead.

The bottom line is that the U.S. and its allies will suffer enormous casualties and economic damage, China may find a pro-U.S. regime on its doorstep, and the North Korean regime will face annihilation.

Given these outcomes, “logic” says that war should be prevented. This would not be difficult to do. If North Korea verifiably stopped its weapons testing and engaged in some dialogue, the U.S. would meet the regime more than halfway with sanctions relief and some expanded trade and investment opportunities.

The problem is that the logic of war proceeds differently than the logic of optimization. It relies on imperfect assessments of the intentions and capabilities of an adversary in an existential situation that offers little time to react.

North Korea believes that the U.S. is bluffing based in part on the prior failures of the U.S. to back up “red line” declarations in Syria, and based on the horrendous damage that would be inflicted upon America’s key ally, South Korea.

North Korea also looks at regimes like Libya and Iraq that gave up nuclear weapons programs and were overthrown. It looks at regimes like Iran that did not give up nuclear weapons programs and were not overthrown. It concludes that in dealing with the U.S., the best path is not to give up your nuclear weapons programs. That’s not entirely irrational given the history of U.S. foreign policy over the past thirty years.

But, the U.S. is not bluffing. Trump is not Obama, he does not use rhetoric for show, he means what he says. Trump’s cabinet officials, generals and admirals also mean what they say. No flag officer wants to lose an American city like Los Angeles on his or her watch. They won’t take even a small chance of letting that happen.

The Trump administration will end the North Korean threat now before the stakes are raised to the nuclear level.

Despite the logic of diplomacy and negotiation, the war with North Korea is coming. That’s the logic of war.

Meanwhile, the stock market continues its run of new highs. There was a pullback over the course of Wednesday and Thursday, and volatility spiked. But nothing significant relative to the recent record run.

The stock market, which is deep into bubble territory, shows no sign yet of repricing based on a horrendous war that’s coming soon.

And of course stocks bounced back today after yesterday’s swoon, as they have typically done during this bull run.

But like I said earlier, “buying the dip” has been a winning strategy — until it isn’t.

Stocks are being driven higher by double-digit year-over-year gains in revenues and earnings and by the percentage of companies beating expectations. But, the expectations game is just that — a game.

Companies lower expectations and then routinely “beat” them to give a pop to the stock. Year-over-year comparisons are good, but that’s only because 2016 was a notably weak year for stocks.

What’s really driving stock prices are expectations of higher earnings year after year. This is the stuff of bubbles. These Wall Street extrapolations assume no war, no recession, no unexpected shocks, and no continued central bank tightening. All four of those assumptions may be wrong. It only takes one of these events to disrupt the rosy scenarios Wall Street analysts are peddling.

I hope I’m wrong, and there’s always a chance that peace may prevail. But all the current warnings and indications point to war.

You may not be able to control the logic of war or the illogic of bubbles, but you can control your own portfolios.

This may be the last opportunity to reduce stocks positions, increase cash allocations, buy gold (not more than 10% of your investible assets), and consider other hard assets such as land, museum quality collectibles, silver, and natural resources.

A few strategically placed bets in the form of select put options are another way to enhance returns while avoiding the deluge to come.


roadhazard Sat, 08/12/2017 - 16:47 Permalink

I believe that Trump is trying to goad Fat Kim into going too far so the US can attack. That is the only logic I see for him to run his mouth like he is. Now that China has told NK that if they fire at Guam they will do nothing to help them the ball is in Fat Kim's court.I say the NK rockets will be fair game as they cross over Japan.

Mustafa Kemal Sat, 08/12/2017 - 16:53 Permalink

" If North Korea verifiably stopped its weapons testing and engaged in some dialogue, the U.S. would meet the regime more than halfway with sanctions relief and some expanded trade and investment opportunities."I plan has been put forward to freeze NK nuke program in exchange for freezing our military adventures on the peninsula. The US is not interested.The US is NOT interested in "dialogue"

bass ackwards Mustafa Kemal Sat, 08/12/2017 - 17:50 Permalink

Bullshit! NOKO signed an agreement in the 90s with Clinton to stop their nuclear program. The US negotiated, NOKO  built them any way. Bush tried to get them back to the table, they declined. Obama tried as well. NOKO shelled a South Korean island two years ago...they sank a South Korean coast guard ship two years before that..they are not meek and innocent as you'd have us beleive. We cant kick this can down the road another 8 years..we cant allow them to build four dozen nuclear icbms and submarine based icbms that could overwelm a missle defense system and incinerate an american city..its time to put this to bed. Bomb them for 40 strait days like we did with Serbia, and let the Chinese know we aren't invading but we are eliminating the threat.

In reply to by Mustafa Kemal

Falcon49 bass ackwards Sun, 08/13/2017 - 07:02 Permalink

What would we do if every year Cuba and Russia held joint military exercises simulating an attack on the US?  What if Russia had troops, naval ships, missiles, and bombers stationed/deployed throughout Caribbean, Mexico, and South America (and all participated in those military exercises).  Now assume the US is run by a dictator that wants to stay in power at all costs....How, would that dictator respond?  How would any government respond?  I would contend that what we are seeing is exactly what any government would do...that is develop a military capability that would ensure that the price is to high to initiate an overt attempt at regime change.  Generally, the US has the advantage of being able to create havoc within a country (economic, social, racial, religious, political) the case of NK those tools of war (and it is war) are very difficult to use against NK.So, NK declined to go back to the table...what would you expect a dictator/oligarchy to do?  They have already seen what happens to countries that have no nuclear weapons capability vs those that do.The important consideration is; if we push for regime change or attempt to take out the treat...will it drive NK's leadership into turning over the chess board and scattering the pieces upon the floor?

In reply to by bass ackwards

Mena Arkansas Sat, 08/12/2017 - 16:54 Permalink

We are at the year 1908, which was the year that the Carnegie began operations, and in that year, the trustees meeting for the first time, raised a specific question, which they discussed throughout the balance of the year in a very learned fashion. And the question is, Is there any means known more effective than war, assuming you wish to alter the life of an entire people? They conclude that no more effective means than war, to that end, is known to humanity.~ Carnegie Endowment for International Peace

johnnycanuck Sat, 08/12/2017 - 17:00 Permalink

"North Korea believes that the U.S. is bluffing based in part on the prior failures of the U.S. to back up “red line” declarations in Syria," Specious claim based on erroneous neocon propaganda.  Anyone writing such a thing for public consumption isn't worth reading as it completely ignores the realities of engaging in significant military action against another country based on a  false flag attack and subsequent propaganda campaign. WMD's and Al Qaeda in Iraq style. 

DuneCreature Sat, 08/12/2017 - 17:08 Permalink

The US Government is so desperate that it is going to war with its own people.

It has been in a low level conflict for years with We The People (War on Drugs, War on the Poor, War on your Shaman and property) but now they are turning up the heat and acting like we are under marital law already.

~~)(~~)(~~** Playing US Constitution BINGO! **~~)(~~)(~~

How do you play?

Watch George Webb.

Follow his lawsuit alleging that the FBI - CIA - JTTF - DoD and Local Law Enforcement are trampling all over the US Constitution.

How do you win?

George prevails in a court of law.

How do you lose?

George Webb Swaggart (sp - someone correct me) loses his case or the case gets buried for 50 years (Or just 2, IMNSHO.)

Don't like playing BINGO or other games of chance (More like games where you HAVE a chance of winning actually.) ... Great, go back to watching CNN or playing the stock market (Where you always win, or so they tell you.).


George is, he is chomping at the bit to get started.

Here is your first four cards:

Day 294.01 =

Day 294.02 =

Day 294.03 =

Day 294.04 =

A background post on this mess from me is coming up........ You enthusiastic lucky BINGO players.

Live Hard, We Can Always Start A Side Pool On George's Life Expectancy, Die Free

~ DC v7.4

seataka DuneCreature Sat, 08/12/2017 - 21:42 Permalink

Yes, the same guys that produced Ukraine, Syria, Libya, even Bosnia/Serbia, are running THAT SAME PROGRAM on the get rid of Trump and any vestiges of the Constitution, while  "WE THE PEOPLE" arre being systematically attacked by what was once covert means: (Microwaves, GMOs, Aspartamine, Flouride, Toxins, nasty Pharmaceuticals, hydrogenated fats, Palm Oil, irradiated food, trace nucleotides,  aluminum, mercury in fillings, vaccines...  it is a distributed attack with homicidal intent. See Georgia Guidestones.Only small crimes need secrecy, the big crimes are protected best by incredulity."Truth would not be stranger than fiction, once we got as used to it." Menken 

In reply to by DuneCreature

Golden Showers Sat, 08/12/2017 - 17:08 Permalink

There is logic to war. It is mathematical, but the more you know your opponent the better.Defending oneself in war is always attacking an enemy.The best way to crush any opponent is to watch your enemy destroy itself while you fuck with it from multiple angles with nothing. Then you hit hard and beat the fuck out of your enemy.That's why people like you find magic card tricks so amazing. People like you read the same article every day and think it's one hundred different articles. People like you want disssent in Google but not here.People like you can't be a janitor, because you can't look two ways.One can always count on one's enemy to think they know  something. Then, when they are proud and boxed in, you kill their entire family and suffocate them. I mean, if a person didn't want to lose, they would not attack.The only time it's not okay to use your own energy is when you can use your enemie's energy. That shit is free.

mo mule Sat, 08/12/2017 - 17:12 Permalink

There is only one motive here. Well maybe 2 but that's only the US military desire to control the world. The only real reason is there are only 4 countries that operate outside of the BIS, Bank of International Settlements, Rothschilds Swift's Program. They are Noth Korea, Iran, Russia and Syria. The US military is the muscle behind this system. 

DaveA Sat, 08/12/2017 - 17:20 Permalink

Wars happen when Side A thinks Side B will back down if pushed harder, and Side B thinks Side A will stop pushing when it sees that Side B is not backing down. If the elites see that war is imminent, they'll back away from the brink. When war happens, it is a surprise. The newspapers of 1917 and 1937 give no hint that a major European war is about to break out.

RawPawg Sat, 08/12/2017 - 17:27 Permalink

i find it hard to believe in the missives of a man who offers advice of obtaining "museum quality collectibles"ain't gonna do me much good for bartering seeds,and ammo,etc,etc when this "Logic" finally kicks in

Archive_file Sat, 08/12/2017 - 17:39 Permalink

Black Sky drill August 23 will be the day we attack NK. That way, America will already be on a war footing. The only left to do afterwards is to turn off all lights at night, turn in scrap metal, pick up your ration cards, buy war bonds, give blood, and enlist.


francis scott … Sat, 08/12/2017 - 17:51 Permalink

Oh, goodie, I get to repost an earlier comment.

This is not Kim Jong-un's strategy.  This is Vladimir Putin's strategy.If you don't see China, Turkey, Iran, Philippines, and, yes North Korea, allsinging  Dixit Dominus Domino Meo  on the very same page with Russia,then you are not an objective observer.  {Psalm 110}

The LORD saith unto my lord: 'Sit thou at My right hand, until I make thine enemies thy footstool.' The rod of Thy strength the LORD will send out of Zion: 'Rule thou in the midst of thine enemies.'  Thy people offer themselves willingly in the day of thy warfare in adornments of holiness, from the womb of the  dawn, thine is the dew of thy youth. The LORD hath sworn, and will not repent: 'Thou art a priest for ever after the manner of Melchizedek.' The Lord at thy right hand doth crush kings in the day of His wrath. He will judge among the nations; He filleth it with dead bodies, He crusheth the head over a wide land. He will drink of the brook in the way; therefore will he lift up the head.  "North Korea believes that the U.S. is bluffing based in part on the prior  failures of the U.S. to back up “red line” declarations in Syria ... 

No, sir, it's one of the factions (the losing one) of the Deep State that thinks Putin is bluffing when he declared Russiawill escalate to deescalate. Trump is many things, but he is not naive. There are only a few in his State Department and his Pentagon who believethere can be anything good to come out of calling Putin's bluff.  If North Korea is attacked with conventional or nuclearweapons, you can depend on NK's nuclear response from submarines laying off of America's Pacific coast. When missiles break through the waves, heading to Vandenberg, JPL, San Diego, San Francisco, Silicon Valley, and LA, there will be no time to figure who the sender was.  There will only be time for the long standing US response to a hostile nuclear strike, which itself was generated by an attack on North Korea. Trump will not cross this Rubicon.  Thank God for that. 

This is the way the world ends, Not with a bangBut a rat cage         ("Don't do it to me.  Do it to Jumbotron") :o/


bardot63 johnnycanuck Sat, 08/12/2017 - 21:18 Permalink

With few exceptions -- Washington, Jackson, Grant, Teddy, JFK, Bush 41, and Ike, presidents have not served as soldiers, and only Washington, Jackson, Teddy, Bush and JFK ever saw front line duty where bullets flew.  Your recent heroes Bubba and Hussein were fucking cowardly draft dodgers.  So give it a break, fuckhead.

In reply to by johnnycanuck

Tommy_Peters Sat, 08/12/2017 - 18:54 Permalink

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You get the sense the global elite is a double-end taser where one end is Tel-Aviv, the other is Pyongyang and the white noise in between, the POTUS inclusive enables the Banking and the Military Industrial Complex to work in tandem. Underneath this Pyongyang is promoting the Thaad in the Pacific while Moscow sells the Sling in the Middle East.

Tommy_Peters Tommy_Peters Sat, 08/12/2017 - 19:07 Permalink

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You are naïve if you are convinced that the US Presidential is an election rather a “power consolidation exercise”. Ask Epstein. If depravity at that level isn’t an ideal key to control, a mere mention of JFK will wing it. Besides, discussing merits and demerits of a puppet, rather the puppeteer, is becoming weary and tiresome.       

In reply to by Tommy_Peters

Rebelrebel7 (not verified) Sat, 08/12/2017 - 20:44 Permalink

Trump tweeted that Americans should unite in response to the Virginia riots and car driving into people.Unite on what cause? Against the Trump administration for the war mongering,?! I voted for Trump and knew that it was a gamble. Hillary promised world war. Trump claimed that he was trying to avoid it. Obviously, he either lied, has been drugged by the Secret Service, or is just not man enough to resist the MIC!Mike Pence is even more of a war monger than Trump!I'm calling the MICs bluff! It will be hilarious to watch you evil fuckers finally get what you deserve! Expect 21 people pissing on your grave!Trump and the MIC will be knocked on their asses if they attempt a "preemptive strike " against North Korea!I've witnessed corruption and war my entire life! If death is the only way out, bring it on!

natashav Rebelrebel7 (not verified) Sat, 08/12/2017 - 23:14 Permalink

I totally agree with you. You couldn't have said it better.I voted for Trump too, but boy he's done a 180 since the election. He's been nothing but a contradiction.American First during the campaign.I'm a globalist after the campaign.I've always been cynical but hoped he'd at least not drop bombs on an empty airfield in Syria.Threaten war with everyone from North Korea, Syria and Venezuela...Corruption and crime from his daughter and son in law, Ivanka and Jared.These two, especially Jared, are serious criminals. Trump is the same as Hillary.The only positive thing about Trump at this point is that we don't have to listen to Hillary's Cackle ona regular basis, listen to Hillary accuse everyone of being racist, xenophobic, and constantly pushthe Transgender social engineering. I suppose that alone makes Trump better than Hillary. The funny thing is, everyone is begging for Trump to be impeached,yet they fail to realize that Mike Pence, and you mentioned above, isa hardcore neocon who publicly declared that Dick Cheney is his mentor and role model.Let that sink in.  

In reply to by Rebelrebel7 (not verified)