We start our podcast today more than 2,500 years ago at a time when the dominant superpower in the western world was the Achaemenid Empire of Persia.
Their civilization had reached an unfathomable level of wealth and sophistication; historical records show that, at peak, the Persian treasury had more than $300 BILLION in savings (in today’s money).
They had an intricate road network, a highly-functioning postal system, impressive engineering works, and had even invented a crude form of refrigeration and air conditioning.
Most of all they had a fearsome military. It was huge. And it was terrifying. Simply put, an invading Persian Army had never been defeated.
And yet, early in the 5th century BC, when they went to war against a rapidly rising power in Greece, the Persians suffered a humiliating defeat. Then again. And again. And again.
The losses changed the perception of their Empire forever. Practically overnight their reputation sank, and they were no longer viewed as a terrifying superpower able to dominate the world.
We’ve seen this story over and over again throughout history, from Ancient Rome to the Mongols to Imperial Portugal in the early 1800s.
Simply put, dominant superpowers almost invariably have an equally dominant, fearsome military that inspires awe and intimidation in the rest of the world… and especially in the superpower’s adversaries.
But superpowers have a life cycle. They rise, peak, and decline. And at some point during the decline, the military begins to show signs of weakness.
Often times there’s some specific event– something happens that’s so humiliating to the superpower that it shocks the world.
This is what happened to the Persians in 490 BC. And it’s what happened to the United States in 2021.
As a West Point graduate and US Army veteran, I still hold in my heart that the US military is the finest fighting force on the planet.
But facts are facts, and the US military is showing clear signs of decline. Most of it is due to incomprehensible failures of leadership.
Today we discuss that decline; I reference a brand new report by the Heritage Foundation, its 2023 Index of US Military Strength, which provides an extremely honest (and distressing) analysis of the US military’s capabilities, capacity, and readiness.
The report spells out in nearly 600 pages of painstaking detail how the US military is rapidly losing (or has already lost) its technological advantages. It shows how there are not enough forces to defend American interests against a major adversary like China. And most importantly, the report concludes that the military is simply not ready.
These conclusions have far-reaching implications.
History has shown over and over again that once a superpower’s veneer of invincibility is pierced, it rapidly loses its status. And that’s even more true when another competing power is on the rise.
Loss of status as the world’s sole superpower goes far beyond reputation and military conflict. The economic consequences are devastating.
That’s because dominant superpowers also tend to own the world’s primary reserve currency– in this case, the US dollar.
Being the world’s reserve currency means that commercial and financial transactions around the world are conducted primarily in US dollars.
So for example, a Brazilian merchant and its supplier in India do business with each other in US dollars. Futures contracts for gold, copper, crude oil, etc. that are traded in foreign commodities exchanges (like the Dubai Gold & Commodities Exchange) are denominated in US dollars.
The dollar is so dominant that when Airbus (a European aircraft manufacturer) sells its jets to European airlines, they typically close those deals using US dollars instead of euros. And giant European companies (like Nestle, BP, and Volkswagen Group) issue corporate bonds in US dollars.
You get the idea.
All of these USD financial and business transactions around the world mean that foreign investors, corporations, governments, and banks HAVE to stockpile US dollars, simply because the dollar is the global reserve currency.
And foreign institutions tend to hold the majority of their dollar assets in US government bonds (which is the largest and most liquid USD asset class in the world).
In total, foreigners collectively own $7.5 trillion worth of US government bonds, equivalent to 25% of the national debt… because they HAVE to own the world’s reserve currency.
This allows the US government to get away with the financial equivalent of murder.
The US government can run outrageous budget deficits, fund endless wars, and pay people to NOT work… and foreigners will still hold US dollars and buy US government bonds.
But this unparalleled privilege would dry up very quickly if the US dollar loses its status as the world’s dominant reserve currency.
I wrote about this briefly earlier in the week. But in today’s podcast, we put all the pieces together.
Specifically, I show you how US military dominance is linked to US superpower status… and the US dollar’s position as the world’s reserve currency.
We look at the lessons from history to examine the trajectory of a superpower in decline. And we try to connect the dots to see where our currency trajectory will lead us.
This fate is not necessarily imminent; strong leadership and better performance from government could arrest the decline.
Unfortunately, the US government seems completely incapable of solving problems.
Their entire approach to problems, in fact, is very cyclical. It goes something like this:
1) The government does something stupid that creates a problem.
2) They ignore the problem they just created and let it fester.
3) When the problem becomes obvious, they offer a symbolic gesture– ‘thoughts and prayers’
4) When the problem becomes so extreme, they panic and do “whatever it takes”
5) “Whatever it takes” is reckless, expensive, and usually destructive, causing the cycle to start over again.
We cover all of this, and more, in today’s episode, which you can download here, or access in iTunes and Spotify.
[00:00:01.590]Today we're going to go back in time to the twelve of September in the year 490 BC, about 40 km outside of the ancient city of Athens in the province of Attica. We're on that day roughly 10,000 Athenian hoplites. These are the ancient Greek warriors who fought in phalanx formations, were facing down a vastly superior army of Persians. By some historical estimates, as many as 1000 Persians. They had cavalry, they had ships, they were terrifying.
[00:00:34.260]And that's the important thing to understand back then. This was 2500 years ago that the Persian known as the Achaemenid Empire was the dominant superpower, particularly in that part of the world, stretching from modern day India to the eastern Mediterranean, basically, to Turkey today. And at the time, at that time, 2500 years ago, there had been other empires that had come before Persia, like the Assyrian Empire, the Babylonian Empire, etc. But at the time, Persia was the biggest empire that had ever existed in world history up to that point in history, 2500 years ago. And it was built by a guy named Cyrus the Great.
[00:01:15.370]And Cyrus is a pretty legendary historical figure who got together as peoples and they defeated the neoBabylonian empire and the medieval empire and so forth, and built this achievemented Persian empire. And it was really impressive. Even by today's standards, it was incredibly wealthy. The Persians were an incredibly advanced civilization. They had a vast network of roads and bridges and very impressive works of engineering.
[00:01:45.990]They had an opulent capital, they perfected landscape architecture, they had gorgeous gardens and parks and things everywhere. They had made substantial technological improvements and things ranging from naval propulsion to windmills and had even developed actually a sort of crude form of air conditioning and refrigeration. They could store ice and cool food underground using basically they built, they carved a deep hole in the ground where the temperature is a little bit cooler. They put a windmill over it and use wind power. So it wasn't even human beings muscle power, it was wind power to suck up the cold air and blow out the hot air and keep things cool underground.
[00:02:25.890]Pretty impressive kind of technology for 2500 years ago to be able to have that. They had a postal system to be able to send and receive mail and packages across the empire. They had a very efficient government bureaucracy. They had a professional class of clerks and bureaucrats who made the whole thing go. They had a very fair and simple tax system, to be honest.
[00:02:53.100]They had a very sort of early form of human rights. Cyrus was really big into this. He formally created a system where people had freedom of religion, freedom of speech, due process with a fair trial, they had equal treatment of women and they were really rich. They were super rich. If you read books, texts of ancient history, including even the Bible and ancient religious text, you might come across this word that uses a unit of measurement called a talent.
[00:03:21.540]And a talent was a unit of weight. In the ancient world, that's equivalent to today, about 30.2 modern day kilograms. So by the historical account that we have available to us, there are certain points where and at certain points probably had more than this, but we know at a certain point, they had at least 188,000 talents, right? So based on modern day gold prices, that's about $300 billion. $300 billion in today's money.
[00:03:51.390]That's a lot of money. To give you an idea, there are a lot of days where the US. Treasury department actually doesn't even have $300 billion in its primary treasury bank account. So $300 billion was a lot of money, even by today's standards. The Persian, the accumulated empire of ancient Persia, would be today one of the wealthiest countries in the world.
[00:04:10.680]They had about 20 million people in the empire. So $300 billion, that works out to be, during the top of my head, that's about, what, $15,000 per capita? That's a pretty big deal. And one of the biggest things as well is that the Persians, it was a very stable place, it was a very stable government. The Persians used to like to brag that their laws would never change.
[00:04:31.950]Royal decrees were irrevocable because they felt that the emperor was descended from their gods and their god was never wrong. So if, if the laws came from the emperor and the emperor comes from god, then we can't change the law, because that would mean that the gods are wrong. And that's inconceivable to the Persians. And so they were very stable in their government. They weren't capricious, and this actually goes into their social values.
[00:05:01.990]Persians were socially, they were actually quite conservative. Just to give you an example, one of the worst crimes that somebody could commit was to have an abortion, which a lot of people are surprised, but yes, they actually did that in the ancient world. But the worst crime of all, the worst crime was to tell a lie. Honesty as a social value was prized above all else in ancient Persia. They had a very high rate of literacy, they had a high rate of education.
[00:05:29.040]But Persia was essentially kind of a war society, a war economy. This is how they expanded. This was commonplace in the ancient world. And children went to school and they're basically taught two things how to fight and to tell the truth. And this is one of the reasons why, when I mentioned before that the government was actually so efficient, it's because they didn't have corruption, they didn't have the waste and the fraud and all the things that are rampant in modern governments and really a lot of governments throughout history, because they were so honest.
[00:06:00.060]They were so honest. And again, to tell a lie was the worst crime to talk about death penalty for people that were considered liars. But at the same time. They were again conservative people. They frowned upon sexual promiscuity and these sorts of things, but they're also very warm and generous people.
[00:06:17.190]They loved the Persians, ironically, were actually the first people to formalize birthday celebrations. This was not uncommon in ancient history where people would celebrate, for example, the birth of the king or the birth of the emperor or something like that. But in Persia this eventually trickled down into just celebrating everyone's birthday and having parties and all these things. And they were very warm with each other. They would give gifts, they loved wine.
[00:06:41.980]They love to drink wine. And their dedication to the truth was so extreme that they even would say that somebody makes a deal and they're completely hammered because they've been drinking too much wine. The deal is a deal. They wouldn't undo things if somebody made a decree or whatever and they had drunk a bunch of wine something. Plans that they made and decrees that they made and promises they made while they were drunk were still honored.
[00:07:07.590]This is a really, really big deal in Persian society. Their standards of etiquette were extremely formalized. They had social ranks and social status just like a lot of people even today. And for example, just to say hello to another greetings between two people of equal social ranks, they would kiss on the lips. If there were differences in social status, then there would be kisses on the cheek and all sorts of things in their customs.
[00:07:30.990]In Persian society, for example, it was considered very rude to eat or drink anything in public out on the street, or God forbid, you spit or blow your nose in public. That was considered incredibly rude. So the Persians, again, they had a very high standards for themselves, their social values, and they did well. Remember, they were very wealthy, $15,000 in sort of net national wealth per capita. It was a lot of money.
[00:07:55.530]And the typical Persian was very well off. They had luxurious homes. And remember, the landscape architecture had been very well developed. So they had beautiful gardens, they had expensive furniture, things that were imported from all over the empire, all over the world. They had very intricate rugs and furs and clothes and textiles that jewelry, gold and silver and precious gemstones.
[00:08:18.220]And one of the actually, the things about Persians that a lot of you may appreciate is that they loved, they loved their dogs as pets. They had dogs, everybody had a dog. They had severe penalties for the mistreatment of animals. And this was life in Persia, and life was really good. And again, above all else, they had this fearsome military.
[00:08:38.430]The Persians had literally, as an invading army, had never lost, ever. Now, on the other side of this, though, were the Greeks. The Persians were again stretching all the way from India to modern day Turkey to the coast of Turkey. Places today that would include places like ismia if you spend any time in Turkey, essentially on the west coast of Turkey back then, the west coast of Turkey, turkey in general, particularly the European portion of Turkey today was considered in the ancient world. It was all considered to be part of Greece.
[00:09:08.950]That part of that western Turkish coast today was considered Ionia in the ancient world. Ioni was essentially a region of Greece and Ionia in the ancient world was actually part of Persia. It was a Persian province. But the Persians sort of stopped there. They didn't go into sort of mainland Greece and to where Athens was in Attica.
[00:09:28.140]And so Athens and Greece in general sort of controlled a lot of the Mediterranean trade. Athens was a rising power, the first really truly democratic power. And they controlled trade in the Mediterranean. The Persians controlled trade from the Silk Road all the way to the Orient in China. They controlled trade up to the Mediterranean, including the Black Sea.
[00:09:46.870]And then the Greeks controlled a lot of trade in the Mediterranean. So it sort of seemed like these two trade powers were eventually going to go to war with each other. And of course it ended up happening. But this is we're talking now as we started this podcast, talking about 490 BC. This is preglden age Greece.
[00:10:02.590]This is before Socrates and Plato and Hippocrates and sophocles Euclid, Thucydides, this is before the real, the true golden age of Greece. But there were some people that Pythagoras, we studied high school geometry and the Pythagorean theorem. Pythagoras was actually an ionian. So he was on what we consider today the west coast of Turkey, which again the Ionian area was the province of the Persian Empire at the time. But the Greeks were rising.
[00:10:33.210]It was before the golden age, but they were rising. They were very well funded. They too were very wealthy. They had access to a place called Larian which is where there were a lot of silver mines, which even at that point in history, remember, this is 2500 years ago. The silver mines of Lauren had already been in operation for more than 2000 years up to that point.
[00:10:52.950]Right? So this is a really, really old mine. And the Athenian treasury, this is in 490 BC, 500 BC. They had over 3000 tons of silver, which today would be worth billions of dollars. The Athenians were very, very small place.
[00:11:08.460]So this is again about probably $10,000 per person in today's money. So in many respects you had the Greeks, they had a strong military, they had perfected the Phalanx formation and the way that the hoplites would fight with each other, shield walls, spears and swords being able to work in unison, in tactical formations. They had excellent ships that they could be used for trade or combat. They had a lot of money. So this is really a rising power.
[00:11:33.360]It's a relatively small place, but it's a rising power. And of course the inevitable happened in starting in 522 BC. So this is a couple of decades before you've got a guy. Cyrus has passed campaigns past other emperors before had passed. And the guy now who's the emperor, what they called king of kings, his name was Darius, now known to history as Darius the Great.
[00:11:56.580]But it was a series of mishaps that got Darius involved with the Greeks. And sort of a long story short, as a lot of these stories usually do, it comes down to one idiot, and in this case, the idiot in question is a guy named Aristocrais. Aristocras was a guy who was in Ionia. He was kind of, let's call him sort of a low level politician, a guy that nobody really cared about, but he was an incredibly ambitious person. And this guy, he's on one island, he looks over to another island and he goes, oh, that other island is pretty weak.
[00:12:28.630]I think I can take them over, but I can't do it myself. I need some support. Now granted, all these different islands in Ionia, they all fall under Persia. So they all have some local nobleman, some local ruler. But the local rulers on these different Ionian islands, they all kick up to the Persians, they all kick up to the Persian governor, who kicks up to the Persian emperor.
[00:12:49.450]So the Persians don't really care which local is in charge of the island. They don't really care as long as they're getting their tax revenue. But Aristocras, he's a really ambitious guy. So he goes to his buddy, he makes buddies with the Persian governor, the regional provincial governor, and he says, hey, I think I can take over that island. What do you say?
[00:13:05.380]Will you help me out? Will you back me on this? And the Persian governor says, yeah, whatever. It doesn't really matter to us which one of you guys is in charge, but that's fine, you're my buddy, I'll go ahead and back you on this. So the Persians backed Aristocrats and they sent some chips and they sent some troops to basically take over this neighboring island of Aristocrats.
[00:13:24.580]But Aristocrats was so stupid, he tried to actually manage this is a very powerful military, they know what they're doing. But Aristagoris tried to commander the whole thing, tried to direct the operation, essentially tried to manage the whole thing. And so the invasion ended up failing, the whole scheme ended up failing. And now aristocracy is going, oh crap, now I'm screwed because now the Persians are angry at me because now they look stupid. And now all the other Greeks, the Ionians, are going to be angry at me because I just tried to basically take over my neighbor.
[00:13:56.290]Everybody hates me, so I got to do something. And so what Aristocrats did to save his own skin as he started inciting rebellion, he went to all the ironies and said, we got to be free from the Persians. We got to be independent. It basically incited insurrection across Ionia. And the Persian was like, Wait a minute.
[00:14:15.220]We just backed you and you screwed it up, and now you're trying to incite rebellion? What is this? This is crazy. But Aristocrats again, the whole thing, he was out to save his own skin. He thought, If I can convince people to make Persia their enemy, then they'll forget all about me.
[00:14:29.520]They'll forget all the ways that I just tried to screw them over. They'll forget about that, and they'll try and go to war against Persia. So Aristagorus went allin he went all in. And so he goes to Athens, which again was a rising power. And he knew also of Athens and the Athenian military power and the sea power that they had.
[00:14:47.010]And he convinced the Athenians and said, hey, we're revolting against the Persians. And he made a case, he made an argument. He said, if you don't help us against the Persians, and someday the Persians are going to come for you, and this is in your best interest to just sort of help us become free of Persia, and that'll keep them busy with us, and they won't ever concentrate on you. And the Athenians said, yeah. Okay, fine.
[00:15:04.990]We'll get involved in your little conflict. And so the Athenians sent a bunch of ships over to Ionia with Aristocrats, and they burned down the capital, the Persian provincial capital. This was not the main imperial capital, but the provisional capital, the provincial capital in Ionia. So now this gets to Darius'attention, right? Now, Darius, he hadn't really been involved before, because, again, he doesn't care whether Aristocras or somebody else is in charge of some island that's way below his level.
[00:15:35.880]But now he finds out, wait a minute, somebody's burned down my provincial capital in Iona. And Darius basically had two questions. Number one, remember, Athens was well known, but to Darius, they weren't so well known that they had made their way all the way to Persian. Darius was way up in the clouds as the emperor, so he didn't get involved in the DayToday details, including even who the Athenians were. So his first question was, who are the Athenians?
[00:16:02.800]And the second question was, how quickly can we get our arm together? Because I want to go vanquish those guys, like, right now. And that's what happened. They got their arm together really fast. Darius was so angry that they burned down his provincial capital, he considered that to be a personal insult.
[00:16:18.250]So he sent one of his most capable commanders, his own son in law, a guy named Meredonius, to command the invasion. We're going to Greece. Whoever those people are, those opinions, we're taking them out right now. And remember, Persia had a terrifying reputation. They had a professional military that they've invaded a lot of places.
[00:16:35.380]They had conquered the Babylonians, they conquered the medieval, they conquered Egypt, they conquered the Levant. They conquered Ionia. They had never been defeated. They were huge. They were wealthy, they had a massive army.
[00:16:44.550]And they were sending their most capable commander, the soninlaw of the emperor himself, guy named Meridonius, to command the invasion. And naturally, off the bat, their initial campaign was incredibly successful. They went across the mainland of Greece, subjugating every city state that they passed. Meredonius was a very, very capable commander. And eventually Darius realized, we didn't have to go to battle with these people anymore.
[00:17:08.910]We can just start demanding their surrender. And there were a lot of city states. Remember, Greece was a very decentralized place, so it wasn't like there was one government or one power. They had all these individual city states. They were all Greek.
[00:17:19.860]They were culturally Greek and linguistically Greek and Ethnically Greek. But they had their own individual governments and their own individual city states. And along the way, these city states were surrendering. And then Darius just started sending them letters saying, hey, my army's coming for you. Meredonius is coming for you.
[00:17:36.090]Just surrender and we can just avoid any bloodshed. And of course, people started surrendering, but then it got to the Athenians and the Athenians didn't want to surrender. The Athenians said, you know what? We're strong. We think we can put up a fight.
[00:17:50.230]We need some allies. We'd like to have some allies, but we think we can put up a fight. And this takes us to back to the 12 September in the year 490 BC. Now, again, we're about 40 km outside of Athens on a vast flat field of farmland. Basically, they grew fennel there in this farmland.
[00:18:09.630]Fennel, if you ever seen it, it sort of a little bit like a cross between a carrot and maybe an onion or something like that. It's a sort of a root vegetable, some bulbs. And they grew fennel on this field about 40 km from Athens. And the Athenians were there again, without they were vastly outnumbered, vastly outnumbered. And they knew they needed some support, so they actually sent who they felt would be the best ally they could have in this battle, the Spartans.
[00:18:37.330]Spartans had a fierce military themselves. And so they sent a runner, a guy named Philippides, and they said, Philippines, we want you to literally run as fast as you can. This guy was the most famous runner in all of Greece. And they sent Philippides to run to Sparta. Run as fast as you can to Sparta, which is almost 250 km, mind you, but this guy ran all the way to Spartan and said, you got to help us.
[00:18:59.140]The Persians are here, the Athenians are going to fight. We're totally outnumbered. You got to help us. And the Spartan said, we'll look into it. Maybe we can get there.
[00:19:06.510]And over the next, some of the the next couple of weeks, good luck. And if we get there in time, then we'll see on the battlefield. Otherwise godspeed. Philippines runs all the way back and says, sorry, the Spartans aren't coming. And the Athenians realize they're all alone here, they've just got to do it.
[00:19:24.010]And so now we're september 12, 490 BC. We're on a farm field 40 km outside of Athens, and they go to battle. And the thing that the Greeks had going for them, they had home field advantage, but they also had superior tactics. Remember, the Persians were a fierce army, but the Persian army were essentially a collection of individual warriors who fought as individuals, not as a unit. They didn't have unit tactics, certainly not as refined to the level that the Greeks had.
[00:19:53.130]And so the Greeks again in their falcons formations, were able to march closer and closer and closer to the Persians, most of whom were basically archers. They had ranged weapons and that was the way they typically vanquished their enemies, as they would have volleys of arrows that would darken the skies. And these arrows would come down and just rain arrows on their enemies. And their enemies would just get terrified and they would run away and they would route the enemies this way and then send in the imagery to cut down a retreating enemy. But in this case, the Greeks, they could form a shield wall both in front of them as well as above their heads.
[00:20:22.690]And this rain of arrows that came down from the Persian archers didn't really penetrate the Phalanxes. And so the Persians now listening, they're saying, oh my God, the Greeks keep coming, they're advancing and they keep advancing and we can't stop them. And finally the Greek failings has got all the way up, right up in the Persian lines, and they had handtohand mealy combat and the Persians weren't ready for that. And the Greeks just destroyed them. The Greeks vanquished them.
[00:20:47.200]And despite being vastly outnumbered, the Athenian forces lost about 192 men. This is literally the historical record shows 192 Athenians felt the Persians lost thousands and thousands and thousands of people. They were humiliated. They were absolutely humiliated. And again, after the victory, it was a lengthy battle, it was a difficult battle, but after it was over, it was shocking to the rest of the world.
[00:21:08.580]And they went back to the same guy. Philippines said, you gotta go to Athens. Now, I know you just came back from Sparta, I know you ran 250 Sparta and 250 km back just to tell us that they're not coming. Now we want you to run to Athens. It's only 40 km.
[00:21:20.590]We want you to run to Athens now and spread the news of our victory. And that's what Philippines did. He ran all the way 40 Athens. And according to legend, he storms into the building, the generals are there eagerly waiting word from the battle, and he says, Rejoice, we conquer. And then, according to legend, collapsed and died.
[00:21:38.360]Now remember, this battlefield was actually a farm, you know, giant farm fields where they're growing fennel. It turns out the Greek word for fennel, at least in the ancient world, was Marathon, and this is known as the Battle of Marathon. And, of course, the commemoration of the battle and the run of Philippides to go back and tell the Athenian generals and the Athenian people that we won the battle. This became the sport, the Marathon sport, according to the legend, that was commemorated in the Olympiads and further later, subsequent sporting competitions. But for the Greeks, it was a major victory.
[00:22:13.900]For the Persians, it was a humiliating defeat. It was completely humiliating. People couldn't believe it. The entire world was shocked. And this was really a major turning point in world history.
[00:22:27.270]This was the start of the Greek golden age. This is the time that especially Athens beat started becoming the dominant power. Now, Darius, of course, having just suffered this major defeat, embarrassing, humiliating defeat, he vows revenge. Now, he doesn't last, really, to seize that vengeance. But his son Xerxes did take up the task.
[00:22:45.810]And a decade later, Darius died a couple of years after Marathon. But ten years later, in 480 BC, his son Zerxis takes up the task. And now Xerxes is furious. And he takes an army of more than two 6 million troops. He's got armies, he's got navy, he's got sailors, he's got people from all over the empire.
[00:23:08.200]He's got Phoenicians, he's got Egyptians, he's got Assyrians all over the known world. He's got dozens and dozens of different ethnicities and languages and cultures and so forth. Two 6 million people. He said, we're going to go get them. We're going to go take them out.
[00:23:23.170]We're going to wipe them off the face of the earth. And he sent two 6 million people over to Greece. And when they would have their encampments, usually this is even in modern military warfare, and certainly in ancient military warfare, whenever an enemy spy was caught, of course, everybody always used to send spies to try and see what's the enemy doing, where they going, how strong are they, et cetera. Usually, spies would be caught, arrested, immediately executed, but not with the Persians. Zerksis would say, no, no, don't kill the spies.
[00:23:52.660]Invite them into our camps. I want the spies to see. I want them to see the 2.6 million people that I brought to vanquish their nation. I want them to see it. And he would take the spies and he would walk them through the camps and say, look upon all of this.
[00:24:08.490]Look at this sea of people here that's come to vanquish you. Now go on about your way. Have a nice meal. Now go on about your way and tell everybody what you saw here. Because he knew it would be so intimidating and so terrifying, and yet it didn't go well.
[00:24:22.780]It didn't go well. Jerkses. They had some initial success. They took some Greek cities. They even actually got to Athens.
[00:24:28.530]The Athenians knew they were coming and the Athenians evacuated. So sort of a little bit of you could call it a Pyrrhic victory because he burned Athens. He burned Athens. And there was some damage there, but overall, it didn't go well. And there are a lot of issues there for them.
[00:24:44.610]Number one, for the Persian army, they had with all these different peoples they had dozens of different languages and it was very difficult to communicate. They had no command and signal in the Persian military because there were just so many people and they couldn't understand orders and so forth. Two is like, let's be honest. The soldiers didn't care. If you're an Egyptian fighting in the Persian army, do you really care if you take Greece or not?
[00:25:05.440]It doesn't really matter to you. The Greeks, on the other hand, they know they're fighting for survival. The Persians, it's just basically mercenary armies. They didn't really care. The most important issue, though, facing the Persians that it was impossible to supply them.
[00:25:17.530]Jerks are used to brag that whenever my army drinks, it dries up the river. And then to a degree that was probably true when you're dealing with 2.6 million people you very quickly outrun your supply lines. You have to constantly be on the move because whenever you sit in camp you basically suck up all the agricultural resources, all the food, all the wild game. Everything that's in the area within 15, 20 basically destroy that. You take all the game, all the food, all the water, everything is all done because you're feeding two, 6 million people at a time.
[00:25:49.980]So you constantly have to pick up and move and go somewhere else. And that's actually puts you at a disadvantage because you don't really have ever the time to say okay, what are our spies? What are our scouts telling us? Where are the Greeks? What's the best approach, et cetera.
[00:26:02.890]You don't really have the time to do that. You're constantly moving and you're making haphazard decisions instead of well planned tactical decisions. And this is how they ended up, for example, in the famous Battle of thermopole in 480 BC. We have a very narrow mountain pass that according to legend, of course, there were 300 Spartans. History always focuses on the Spartans.
[00:26:21.660]There were other people there. There were several hundred, possibly in a couple of thousand Greeks from other groups. But of course, 300 Spartans there and stood down this army of two 6 million Persians. And all the Persians basically had this very narrow mountain pass. The Persians marched through there.
[00:26:37.120]They had to get past the Greeks and the Persians who were very impressed with the Spartans and their courage. And of course, the famous story where the Persians stood up and said if you lay down your weapons, we'll give you everything you want. We'll give you riches and power and then we'll do a. Deal. It will be really great for you.
[00:26:54.300]Just lay down your weapons. And the Spartans, who were famously this is actually where the word laconic comes from, they were very terse in their speech, and the word laconic actually comes from the word the Spartans are also known as they were known as the Lacedaemonians, and the word laconic being very terse and abbreviated with your speech. And the Spartans said, Come and take them. And that's, of course, the legend. And this is sort of an Alamotype battle where the Spartans very bravely fought and cut down an unknown quantity of Persians before they themselves came and the Persians marched through.
[00:27:30.120]There were actually two Spartans who survived. One of them ended up falling at a later battle, and the other, who was so ashamed that he survived all of his comrades Paris, that he ended up hanging himself out of shame. But this is something this Battle of Thermopoly really depleted the Persian morale. You got all these soldiers again, you got soldiers that basically mercenaries. They're not Persian.
[00:27:49.770]They're from some other tribe, some other language. They don't even understand what the other people are saying. They don't know why they're there. They don't really care. They constantly have to move.
[00:27:58.060]It's a pain in the ass. And now they just watch a bunch of their buddies die because 300 people wouldn't get out of the way in a narrow mountain pass. So, you know, this is something that really depleted a lot of the Persian morale. And then eventually after thermopoli the Persian military was embarrassed yet again at the Battle of Salamis, and then finally the Battle of Plateau in 479. And after the battle, pateas, the Persians were done.
[00:28:24.120]They went home for good. And this is now the clear sign that the Greeks are the dominant superpower, and the Persians practically overnight went into secondary power status, and the consequences, obviously, were extreme. Imagine being a Persian at the time, right? Imagine being a Persian. You go from you're the dominant superpower, you got this great life.
[00:28:46.060]You got this nice house and nice rugs and beautiful wife and beautiful clothes, and your kids are in school and everybody's happy and this well functioning government and so forth that you've never lost. And you hear news, all of a sudden, 490 BC, you lose the Battle of Marathon. Now you lose Plateau, and the Persian army comes home. And just imagine hearing the news. Imagine being in Persia and hearing the news, and you've got to be saying, Are you kidding me?
[00:29:10.140]Are you kidding me? First marathon, and now this. We sent 2.6 million people and we lost. Are you kidding me? Imagine you would be furious, you would be furious if you were a Persian knowing we're supposed to be the dominant superpower.
[00:29:26.340]We're supposed to kick everybody's ass. We've never lost. And now we've suffered multiple humiliations, one after another after another at the hands of the Greeks. The greeks. Are you kidding me?
[00:29:39.460]You would be furious. It would be such a humiliation. And yet it happened. And the result of all this, again, we're talking about in a very short period of time, this aura of invincibility, of the Persian military was pierced. And all of a sudden, all these different territories, whether it was in Europe or Ionia or Egypt, there were provincial revolts broke out and people were going, I'm not afraid of these people.
[00:30:05.260]The Greeks beat them. We can beat them too. We don't have to be afraid of these guys. And to make matters worse, the Greeks went on the offensive. They formed an alliance called the Delian League.
[00:30:14.760]It was sort of like a kind of like a NATO type organization where people pretend that NATO is a multinational organization, but it's really dominated by the United States. So the Delin League was supposed to be this sort of multi tribal, multi city state organization, but it was really dominated by the Athenians. So the delegates sort of code for this Athenian alliance, and the Athenians, through the delegate, they went on the offensive and they took Persian territory. So Persians were losing territory now to the Athenians in the Delian League. They're losing territory to all these revolts.
[00:30:45.120]They had to go and take their army, which had just retreated, once again with a tail between their legs, and they had to go back and reconquer territory, just trying to keep the empire together, which was very expensive and humiliating. It was so humiliating. And everybody looking at Persia now, it was supposed to be the dominant supermarket said, you're not so bad, you're not so tough. And Persia languished. It also fundamentally changed the culture, whereas once there was a very orderly government, very orderly succession and transition from one emperor to another, from one government to another, now you had assassinations became rampant.
[00:31:20.760]Turkses himself was assassinated. His grandson Zerksei II was assassinated. About half a dozen other emperors ultimately were assassinated before finally the Persian empire just disintegrated into the dustbin of history. When it took about 150 years. These declines and falls oftentimes take a while.
[00:31:38.310]About 150 years later, here comes Alexander the Great. And this is actually an interesting story because Alexander grew up I mean, this is 150 years later, right? So Alexander as a kid grows up reading about, learning about the Persian, attempted Persian invasions of Greece as a kid. Now alexander is Macedonian. But the Macedonians and Alexander himself view themselves as Greek.
[00:31:59.310]They were culturally Greek, they were ethnically Greek, viewed Macedonia as part of Greek. It was just greater Greece. And so he's thinking, these Persians tried to invade Greece, tried to invade my homeland. He grew up hating, hating the Persians. Alexander the Great hated the Persians.
[00:32:15.580]When Alexander came of age and took control of the armies and so forth, one of the first places he went was to Persia, and he crossed the Jellispant, which is basically the Dardanelles in Turkey and crosses the Hellespont and goes into Persia. And the Persians were at that point, they knew they were about finished, and he was conquering Persian land and Persian territory left and right, and it was just unstoppable. And the Persian emperor at the time knew it. I think it was Darius III, but don't quote me on that. Anyways, the emperor the emperor goes, and he sends an emissary, and he offers Alexander the Great 10,000 talents, 10,000 talents, which is about $25 billion in today's money.
[00:32:53.500]He offers Alexander $25 billion. He offers him recognition, sovereign recognition of all the territories you've conquered, that I will recognize your sovereignty over all this land. That used to be mine, now it's yours. I recognize your sovereignty, and I'll even give you my daughter's hand in marriage if we can just be friends, and you, please leave us alone. And there's a famous story where Alexander's second in command, a guy named Parmeno, they look at this deal and Parmenio says, wow, that's a pretty generous deal.
[00:33:19.620]I would take that deal, said Parmenio. And Alexander, who used to travel everywhere with his own scribes and his own historians and historical account of this, basically, Alexander says, yeah, I would take that deal, too, if I were you, Parmenia, but I'm not you. I'm Alexander the Great, and I don't need the Emperor of Persia to recognize my sovereignty. I already kicked his ass all over his own empire. I already seized his lands.
[00:33:43.560]I don't need his recognition of what I've already done. I don't need his $25 billion. I don't need his 10,000 talents. If I want his 10,000 talents, I'll go take his £10,000. If I want to marry his daughter, I'll go marry his daughter.
[00:33:54.640]I don't need this guy. So, no, I'm not going to take that deal. And Alexander march straight into the capital, and he took Persia, and that was it. Poof. No more Persian empire.
[00:34:03.730]Now, all this is really a familiar story. The whole story really goes back to the idea that you've got a dominant superpower, and then something happens, usually because it's a military weakness, something happens. The empire is embarrassed, humiliated. That veneer, that aura of invincibility is pierced. And then everybody else says, we don't need to be afraid of these guys.
[00:34:26.080]They're not so tough. It happened to the Romans in 378 Ad, the Battle of Hydrianopoulos, in which the Romans were humiliated by the barbarian Goths. And all of a sudden now it was signified the loss of Roman humiliation. The loss was so bad, they didn't just lose, because you can lose. You can lose a battle here and there.
[00:34:44.580]It's not a big deal to lose an occasional battle, because you can always have an excuse. You can always blame. The general was incompetent, and now we've sacked him or we executed him, or whatever. There was, you see, in some cases, an ancient battle where there was a solar eclipse. And in the middle of the battle, there was a solar eclipse.
[00:35:00.820]And people freaked out and ran away because they thought the gods were angry at them. And the world's going to come to an end. All sorts of things that might happen over the course of an empire, and you can lose an occasional battle, but it's when you get humiliated. And that's what happened to Rome and that's what happened to Persia after Marathon was coming to Rome in the Battle of Adrianopoulos in 378 Ad. And the barbarians said, these people aren't tough.
[00:35:22.230]We don't have to be afraid of them. Of course, the barbarians said, OK, let's do it. And so they crossed into Roman territory, and western Rome at that point was basically finished. Rome itself had been sacked and Rome was done. There's another, actually interesting example.
[00:35:37.590]On November 27, 1008, seven, Napoleon is on the march going into Portugal, and the Portuguese were so terrified at this point, portugal was technically an empire. They had colonies all over the world, and the Portuguese, the entire imperial court, not just the Emperor and his concubines and so forth, but everybody, about 100 people from the Portuguese imperial court had to flee Lisbon because Napoleon was at the gates. And they got on ships and they left Lisbon and they went to Brazil, which was one of their colonies. They went to Brazil and they set up their entire they basically created a new capital of their empire in Brazil. Now, you could imagine if you're the Brazilians, you've been subjugated by the Portuguese empire, the Portuguese Empire, which just had to flee to your place because they had to flee Napoleon.
[00:36:24.850]That's probably not going to impress you very much, right? You're going to look at this and see the entire imperial court just showed up because they're running away naturally in Brazil, ended up declaring independence against Portugal about 15 years, right? So the Portuguese empire, they suffered a humiliation. It was even really before the battle, they they were so afraid, they didn't want to have a battle with Napoleon, and they and they ran away. And so that basically caused this disintegration of the Portuguese Empire, and they lost Brazil and a lot of the colonies after that.
[00:36:53.760]So, again, this is a very familiar story, and it starts with weakness. Weakness. It's when enemies see adversaries, see weakness. And a lot of times that weakness tends to come from the military. Now, military weakness, a lot of reasons for that could be because the military is exhausted.
[00:37:09.960]We've seen many examples of this throughout history, obviously a lot of examples from Rome, etc. Where you've got a military that's just been so overused and so overextended, the military is just exhausted. Another obvious reason that we've seen over and over and over again from Rome to the United Kingdom is when funding dries up due to economic decline, they just don't have enough money anymore. To be able to pay the military, keep everybody up to date with the latest equipment and so forth. They can't pay the troops as much anymore.
[00:37:35.830]And so economic decline drives weakness in the military. And another one, obviously, is internal dissent, social changes, social conflicts, changes in social priorities that end up bleeding into and infecting the military. And there are numerous examples of this throughout history. A lot of people know about the Russian revolution in the early 1900s. In 1917, that was obviously the successful revolution.
[00:37:57.330]But there are actually failed revolutions, unsuccessful revolutions before that. There was one in 1905, a socialist Russian revolution, 19 five. Before that, Russia, you had the Russian empire and the tsar and all of that, but socialism was on the rise. The works of socialism and socialist thought leaders had really gravitated in Russia. And we're gaining ground.
[00:38:19.510]And there was an unsuccessful revolution in 19 five. And in 19 five there was an incident where the battleship, there's a Russian battleship naval ship named the pumpkin and the pumpkin crew mutinied against their officers because of these social conflicts. The social conflict was so strong and so dominant that actually took over order and discipline in the military. And the crew mutinied against its officers because of the prevailing social conflict we see later on in Russia. 1937.
[00:38:46.050]There was a great purge in the red army where soldiers are riding each other out and officers are being executed and so forth to figure out who is a good communist and who wasn't a good communist because they couldn't tolerate any different social or economic or political ideology. That was the sort of prevailing social trend. We must be of all one mind in our ideology. And anybody that isn't, we're going to literally execute. And that infected the military as well.
[00:39:10.780]So they deliberately weakened the military in order to have this singlemindedness in there, you know, singleminded ideology in the ranks. And so they deliberately weakened their military and they executed officers and soldiers who had a lot of combat experience and so forth going into world war II. This is 1937, right? So we're going into world war two, and we're literally going to execute people that have a lot of combat experience and weaken the military at a time we really can't afford to do that. The Iranians did the same thing.
[00:39:40.160]1979, after the Iranian revolution, the Islamic revolution in Iran, they did the same thing. They had to purge the military. And a lot of people don't realize this, but before that, before the Iranian revolution, iran was a very strong country, a rising country. And the shah of Iran knew that they had so much money and they were going to make so much money because of their oil wealth, vast oil wealth that still exists to this day. And the shah knew that because of all this money they were going to become a great power in the world, a major global power, not necessarily to the level of the US.
[00:40:10.420]But they were really going to be a major global power. And because of that, they should have a modern and fierce military force. And so they were buying weapons and equipment from western countries and training their military. And so for the building up, really, the iranians had a lot of very strong military capabilities going into the late 1970s, but then they had the purge after the islamic revolution. They said, nope, we must be single minded in the ranks, and we cannot tolerate any kind of intellectual dissent.
[00:40:38.380]And they had a 60% desertion rate, and they destroyed a lot of their weapons and equipment because it came from western countries, and they executed their officers and all these things. And then right after that, they ended up going to war with their neighbor, with iraq and saddam hussein. And by the end of the war, the iranian army had been so depleted because of this purge in many respects, that they were practically fighting with sticks and stones, human waves and bayonet charges and so forth. They had deliberately depleted and plundered their own military and made it weak. So this is, this is something we've seen over and over again throughout history, a military that gets weak.
[00:41:16.050]Various reasons, again, could be because of over exhaustion, could be because of economic decline, also because of social issues that bleed into the military. But either way, this kind of weakness and the loss of military power is a hallmark of a superpower and decline. The loss of military power creates a loss of reputation, pierces that aura of invincibility, and it is a hallmark of a superpower and decline. Usually it happens because there's an event that's followed by another and another and another, and then adversaries start to probe those weaknesses. I think clearly the United States already had this in 2021.
[00:41:52.930]The utter humiliation of the withdrawal from afghanistan was so shocking. And that's the thing that's also that, like I said, there's an event. And the thing about the event, it's not just that somebody loses a battle, right? Because you can lose a battle. It's something that is so shocking.
[00:42:11.100]The superpower is humiliated. They don't just lose, they're humiliated like the persians at marathon or again, xerxes with two 6 million people and got humiliated. It pierces the veneer of invincibility. And suddenly people go, really? I'm supposed to be afraid of these guys?
[00:42:29.310]And you got to imagine world leaders adversaries to the United States, watching the withdrawal of Afghanistan, watching the US. Military abandon billions, tens of billions of dollars of military equipment, tanks, armored personnel carriers, military aircraft, abandoning that stuff, walking away, running away from the bases, leaving all that stuff behind for their sworn enemy to just take over here. Taliban have billions and billions of dollars of helicopters and aircraft. I mean, you got to imagine the chinese watching this going, are you serious? I'm supposed to be afraid of these guys looking at human beings clutching the landing gear of aircraft, trying to fly away?
[00:43:09.560]It was so shocking to everybody that saw it. Just like Persians in 490 and 480 BC going, are you kidding me? We're supposed to be the superpower. You take two 6 million people to Greece and you lose people around the world, especially in the United States, watching these horrible, the horrible footage we saw on TV from the withdrawal of Afghanistan, people going, are you kidding me? People are furious.
[00:43:32.580]They are irate because it is so humiliating. But it wasn't just Afghanistan. Again, one loss you can deal with and you can sort of explain that away, but then it's like it's another and another and another and another and another. And it's so many of these things that we've seen over and over again. It's been, for example, with the Navy, it's been amateur night with the Navy, they had the USS Vs Gerald and the USS John McCain.
[00:43:55.500]Nine weeks apart, two United States naval vessels colliding into other ships, just crashing into other ships because they determined that the bridge crews were incompetent and not doing their jobs. And the Navy, during COVID, where the USS Theodore Roosevelt and the captain was screaming to the world, we have COVID. We have COVID on the ships and basically telling all adversaries of the United States, well if we get a virus on board, then we're just going to scream and yell and we're going to be weak and we're not going to be able to do our jobs. And all these things that you see over and over again, the super woke recruiting ads from the CIA and the US army will be talking about recruiting here in a minute, or the fact that they've shifted from focusing on national security to focusing on these social issues now that frankly, don't have any business with national security. So the Department of Defense decided that their aptitude tests are, need, need to be, to be changed.
[00:44:52.110]And they're changing their physical fitness test and they're changing the Special Operations Command, creating an Office of Diversity and Inclusion, as if diversity and inclusion should have anything to do with special operations. Does anybody honestly think, even the most progressive person in the world, that you honestly think that the Chinese give a shit about how diverse and inclusive special operations in the United States are? Are they really going to tremble in fear about our diversity and inclusion? And these are the sorts of things you start it's more than Afghanistan. You start with a withdrawal from Afghanistan, and then you hear the Chinese and you see that, then you see some woke recruiting ad, then you see, you see naval ships colliding into each other and you see the Office of Diversity and Inclusion and you see all these things.
[00:45:38.680]And then the biggest one of all, if I'm really honest about it, the biggest one of all was in 2020 for at least nine months that we know about, possibly much longer than that, but at least nine months, hackers had access through an exploit in software from a company group called SolarWinds. SolarWinds is software that basically underpins almost every major Fortune 500 company, almost every department in the US. Government, including the Defense Department, the Department of Homeland Security, and SolarWinds got hacked. How? Because the update server, right, when you have software on your system, and then from time to time, if you have any software, basically you probably seen this comes, you get a little window that says, oh, you need to update your software.
[00:46:23.560]So it goes out to there's a server that has the update software, and so the update server for SolarWinds, the password for the update server, this is 100% true. Feel free to verify this yourself. The password for the SolarWinds update server was SolarWinds, one, two, three. And now imagine you're a hacker, right? You're a hacker that penetrates the system if you're going, are these people serious?
[00:46:45.790]These are supposed to be the tough guys. These are supposed to be the big shots. These guys are supposed to be the most advanced people on the planet. Their passwords solo in one, two, three. And they got access to the national security of the NSA, the Department of Defense.
[00:46:58.540]And what did the US. Do about what did the military do about what the government do about it? Nothing. Nothing? Absolutely nothing.
[00:47:06.630]So this is the sort of thing, if you're an adversary of the United States, if you're a Chinese, and you're looking at all of this in totality, in the context of all this, are you really going to be afraid? Is the rest of the world really going to look at the US. And say, oh, those guys are the baddest guys around? It's totally ridiculous. But to add to that is just a little bit more detail.
[00:47:27.790]Just came from the Heritage Foundation. The Heritage Foundation, again, this is more of a rightleaning. It's not some nonpartisan totally objective group, but definitely more right leaning. So you got to take everything they say with a grain of salt. But they just put out an annual index of military strength this fiscal year 2023, and the government now so it's called the 2023 index of military strength, the US military strength.
[00:47:48.280]And the thing about it is, while this is definitely more of a rightleaning organization, it's not really a partisan or highly biased work. It's 600 pages. I read through it, and it's just something that came out very recently, literally just in the last week. And I got to say it's not something that really smacks of bias. They actually use the military's own ranking and the military's own data in assessment.
[00:48:14.290]So essentially all they're really doing is aggregating what the military itself is already putting out. And they rate us. Military strength based on three things capability. Capacity and readiness. And in short, capability is what you can do, right?
[00:48:28.170]If you think about, let's say, you're, I don't know, building a house, right? You need certain capabilities. You need to know how to lay a foundation, you know how to put on a roof. You need to know framing, electrical work, plumbing, et cetera. You need to know how to do these things.
[00:48:40.780]These are all capabilities. Plumbing and electrical work and roofing, these are all capabilities in the military, missile defense and light infantry tactics and long range stealth bombing and cyber warfare, these are all capabilities. Depending on the mission, you would use certain capabilities and not have to use certain capabilities. So if you're going on a peacekeeping mission to the Balkans, for example, as they did so much in the 1990s, you don't necessarily need your missile defense or your nuclear capabilities, but you might need your security and logistics capabilities, for example. So that's the idea of capabilities and so their rating capabilities and capabilities has a lot to do with the sort of breadth of what you can do.
[00:49:18.960]It has a lot to do with technology. Obviously, the better tech you have, better capability you have. Capacity is based on how much of it you have, right? If you have sure, we might have the ability to engage in missile defense, but if we only have one missile defense system, then we're actually not so great. So that capacity is how much of you have and readiness is are you ready to go?
[00:49:41.080]Do you have the ability to go at a moment's notice? And obviously, ideally, you want to have a lot of high tech equipment, wide variety of branches and capabilities, cyber warfare, light imagery, missile defense, long range stealth, nuclear, etc, etc. All of it ready to go at a moment's notice. Highly trained, ready to go at the drop of a hat. That's what you want.
[00:49:58.840]High capability, high capacity, high readiness. But empires in decline have to make tradeoffs. And that's kind of where the US military is right now. And what the Heritage Foundation is doing is taking the US military's own assessments, internal assessments that they've already put out and they've already published. They're aggregating it and putting in a lot more analysis, a lot more detail.
[00:50:17.460]And in general, the US military ranks very, very poorly across the board, with one exception, and that is unsurprisingly. The US Marine Corps. The US Marine Corps ranks pretty well, pretty well in this ranking system, but everybody else is just pitiful. Just, just pitiful. And to kind of get into it a little bit and I'd encourage you at least to read the executive summary and it really spells it out a lot.
[00:50:40.350]The executive summary is a couple of pages. I went through the whole almost 500 some odd pages of this. It's a lot, but there's a lot of detail in there. And for example, if you look at the US army, the tanks the US Army has this is 40 year old technology. 40 year old technology.
[00:50:55.910]The army and this is in terms of capabilities, right? In the Air Force, the average aircraft age in the Air Force is 30 years old. The army has now focused so long on counterinsurgency that according to the Army's own internal assessments, they're rapidly losing their capabilities to conduct conventional combined arms warfare. Actually, when you think about sort of World War II going out with large mass amounts of troops in a battlefield and meeting another enemy head on in a battlefield, whether it's a tank battle or an infantry battle and so forth, they kind of lost the ability to do that. And if you're planning a war with a major adversary, possibly like the Chinese, that might be a capability that you want to maintain, right?
[00:51:34.170]And they're losing that capability to be able to do that. From a capacity perspective, get capacity a minute. From a readiness perspective. We got training resources been slashed. The Air Force, the Air Force ranks the worst, by the way, in all of this.
[00:51:48.130]Not to take anything away from anybody, but the truth is what it is. And Air Force flight hours, for example, training time, training hours, the pilots tracked by how many hours they're flying and so forth, really at historic lows. It's been in decline for years, and in 2020 and 2021 hit historic lows. The army has been exhausted from so much warfare. Navy and Air Force equipment, the ships and the aircraft and so forth have just been plagued by constant maintenance.
[00:52:14.530]Part of that because they're so old. And after a while, when military equipment gets old and it's over utilized, it's just hard to keep it going. And so readiness suffers as a result of that. The Air Force actually had a mandate for a while that they were going to reach an readiness rate. And then they just kept missing it and missing it and missing it.
[00:52:32.160]And then after a while they just abandoned and stopped tracking that statistic. They certainly stopped publishing that statistics. And now we're going to focus on other priorities. So if at first you don't succeed, just stop even counting what you're not successful at, and then the problem goes away. It's kind of a ridiculous way to do it.
[00:52:48.610]And then the last thing you think about capacity. Capacity is shrinking. Right. Ten years ago, the Army's measurement for capacity is a unit size they call a Brigade Combat Team or BCT. This is actually a relatively new thing.
[00:53:01.560]They started the BCT concept about 2025 years ago. And about a decade ago, the army was aiming for to have 50 BCTS, 50 Brigade Combat teams. But because of budget cuts and so forth, due to economic decline, etc, or budget cuts being have reduced that now, now their goal is to get to 30, 31 BCTS. That's a lot lower than the 50 that. They were going for.
[00:53:24.490]So the navy at the same time is unable to build enough ships to meet its congressionally mandated fleet size. Not only can they not meet their own internal goal, they can't even meet the minimum fleet size that is required by law, the air force. The whole F 35 debacle is such a joke. There's a massive pilot shortage, and this is really a problem that plagues the entire military, is that recruiting in general is down big time. Big time.
[00:53:51.760]I have to say, all of this doesn't take anything away from the fighting spirit of the US military. I'm a West Point graduate. I'm ex army. I'm an army veteran. I still believe my day to my dying days, I believe that the US military fighting spirit is second to none.
[00:54:06.670]But facts are facts. Truth is truth, and it's important to look at these things as an objective appraisal. And one of the things that is so obvious is that capacity is falling because recruiting is down so much in the army. For example, recruiting is the lowest it's ever been since they did away with a draft. As soon as soon as an all volunteer force, they were still able to actually draw from an all volunteer force.
[00:54:30.660]People volunteered to serve in the army, but now recruiting is down to the lowest level that it's been since they ended the draft. And that's a really, really big deal. And it's not hard to see why. If you look at, for example, just really bad priorities. If you look at the national priorities, they put national security behind other things like we talked about earlier.
[00:54:50.910]They say, oh, no, we're all about diversity and inclusion now, or your vaccination status or all these sorts of things now that they put ahead of national security. One of the things, though, that's interesting is that there's a significant decline of the population of the United States that even qualifies to serve in the military whether or not they sign up. It's just at a certain point, you've got people that have to be medically and physically qualified to serve. There's been a 20% proportional decline in the people that are even qualified to serve. The qualified to sign up mostly because of obesity.
[00:55:21.490]Young people have become so obese, and then you've got mental health issues, etc. And so there's such a major, honestly, crisis in obesity and mental health in the United States. Gee, I wonder how that could happen. We've locked everybody in our homes, everybody's eating, you know, goddamn Big Macs all day being stressed out and depressed out of their minds, and now we have this crazy proportion of people in decline that's even qualified to serve because they're overweight and they're overstressed. And that has serious national security implications.
[00:55:51.490]Through the course of these podcasts, since I've resurrected this and started doing these again, I've been talking about these things I call the four forces of decline. We did an entire podcast on the forces of energy, and we'll continue to talk about that because it's so important and how energy is becoming more expensive, not just in dollar and currency terms, but in energy terms itself. Net energy is getting lower, energy return on energy, investors getting lower, and that has a serious, serious implication on future prosperity. We also talk a lot about forces of economy, the debts and the deficits and pension funds like Social Security that are going insolvent and are underfunded, et cetera. The forces of society, the anger and the vitriol and the Twitter feuds, and the censorship and the mostly peaceful protests, and all these things that happen with people just at each other's throats, and the failure to be able to have a rational conversation, the fact that you can't go to an airport anymore without seeing a fist fight because people just so tightly wound about stuff.
[00:56:47.500]And these are forces of society that contribute all the forces of decline. This one today that I'm talking about is part of what I call the forces of history that lead to decline. The forces of history are these things like the life cycle of empires. Empires, like people, have a lifespan. Everybody is different.
[00:57:09.030]Every human being is different. We all have a different life. Empires, they're all different. They all have different lives and different life cycles. But just like human beings, there are similar characteristics.
[00:57:17.520]Most people, a lot of people share certain things. We're all born. People go to school, they have careers, they get married, they have kids, they retire. Not everybody follows that, but most people kind of follow that. The individual details along the way obviously change and are radically different for people.
[00:57:32.140]But there are certain events and milestones and so forth throughout people's lifespans and lives that are very similar across the world. And that's the way we've seen across empires throughout history. Empires are born, they rise, they peak, they decline. And there are certain things that happen. We see empires start to spend too much money.
[00:57:49.360]We start to see them go into debt. We start to see them debate their currencies. They start losing the military battles, they start looking weak to their adversaries, they're borrowing more money. There's internal conflict and the social priorities change, and there's internal descent and all these things that happen, those types of milestones, they're very, very common throughout the life cycle of an empire. And so you can sort of see these things in the course of an empire.
[00:58:15.040]When empires are born, people are hungry, they're productive, they work hard, there's unity of purpose. Imagine being a Persian running around with Cyrus, right, and you look at it and you can see it, you can taste it. You know, wow, we are becoming something, we're becoming powerful. You can feel it in your bones as your empire grows and grows and grows every day. And people are working hard.
[00:58:35.760]They're putting their heads down. They're not complaining and whining and moaning about stuff. They're working because there is unity of purpose, increase in productivity, the education, technological development that grows. And then, you know, things peak, right? As they rise and rise, they get better, and suddenly there's another generation, another generation, and suddenly you've got these later generations that they didn't have to put in the work.
[00:58:56.910]They weren't around when they weren't the dominant superpower. That's all they've ever known, is this wealth and luxury and superpower status. That's all they know. And so they don't have the same values, they don't have the same unity of purpose. And I've mentioned an economist many times in these podcasts, a guy named Robert Triffin, and he's not one of these Nobel Prize winning people, although I would argue that the Nobel Prize is not so cracked up, is not as cracked up as opposed to be.
[00:59:24.220]But Robert Trifon's main theory, the theory that he posed, was actually called Trifon's Dilemma. In short, essentially posits that a superpower cannot last simply because as it grows and becomes dominant and so wealthy, it becomes too expensive to produce everything that it needs. At a certain point in the United States, it became too expensive to produce little things like socks and underwear, right? You just can't compete with Mexico or China or Bangladesh or whatever cheaper countries that can produce it for a lot cheaper because they're not paying their labor as much and all these things. And so you start to import things, and you import more and more and more, and you start running trade deficits and eventually budget deficits and so forth.
[01:00:05.530]And this is what Trifon's Dilemma is all about, is that as the economy becomes so successful, it becomes a victim of its own success and starts running these big deficits, which takes away the power and eventually causes the decline. And again, that's what happens in decline. People take their wealth for granted. They lose the edge. There's changes in social priorities, internal discord range, because they don't have basic problems anymore.
[01:00:26.020]They're not trying to grow because it's already a rich country. They don't have to worry. They're not a poor country. They don't have to worry about how am I going to feed my family? And all these sorts of things that people in very, very poor countries have to deal with.
[01:00:38.660]Problems that people have in rich countries pale in comparison to problems that poor people have in very poor countries. Very poor people in very poor countries don't have mobile phones. They can't go on Twitter and bitch about their problems because they don't have electricity, they don't have any basic things. And when you're in a rich country, even when it's on the decline, you know, people just don't have the basic problems anymore. And so they start finding things to be outraged about.
[01:01:06.710]And again, it doesn't take anything away from the problems. I'd say there aren't other problems but it is part of the life cycle of empire. And I brought up that great John Adams quote before, which I'll paraphrase, where he's writing to his wife Abigail, and he says, I must study politics in war so that my sons can study science and math, so that their sons can study art and literature and philosophy and so forth. And I always have to add the part in the end would say so that their great great grandchildren can study diversity and inclusion and gender studies, right? This is the sort of thing, and again, not even to take anything away, not even to pass judgment on anything that people do.
[01:01:41.980]But it is the lifecycle of empire where people take away from the things that made the empire great to begin with, and suddenly priorities just change. And it's now, instead of unity of purpose, it's internal discord, populism, socialism, debt jubilee's, all these sorts of things. The overspending, the currency debasement, and yes, decline in military capabilities. The reason this is all so important is because, as we talk about quite often in notes in the field, reserve currency status is usually one of the other hallmarks of being the dominant superpower. The reserve currency is the thing that the rest of the world uses for global trade and commerce and financial transactions.
[01:02:20.700]If you go to, if you go to not even in the United States, if you go to London, if you go to Dubai, if you go to major financial centers, you will see commodities contracts, you'll see gold contracts and copper contracts and coffee contracts denominated in a foreign exchange traded by foreign investors, denominated by denominated in US dollars, right? That's what it means to have the reserve currency status. If you're a company, you know, company in New Zealand and a company in Argentina doing business with each other in US. Dollars. I made some comments about this in a letter, and I was like, it's actually so ridiculous that when a European aircraft manufacturer like Airbus sells jet planes to a European airline like Air France, instead of closing that deal in euros, they do the deal in US.
[01:03:06.570]Dollars. It's weird. It's weird. Huge companies. Nestle, BP, Volkswagen Group.
[01:03:13.090]They sell corporate bonds in US dollars. You have sovereign governments that issue government bonds in US dollars. That's what it means to have the reserve currency. And because of that, because so much is done in US dollars, it basically means that the rest of the world has to have US. Dollars.
[01:03:27.580]The rest of the world has to stockpile US. Dollars and us. Dollar assets. And typically what that means is they buy US. Government bonds.
[01:03:35.490]Why US. Government bonds? US. Government bonds is essentially us. Debt.
[01:03:38.890]It's government debt, right? And because there's so much of it, u. S. Debt is 30 plus trillion dollars. So there's so much of it.
- S. Debt is basically the biggest, most liquid us. Dollar asset in the world, right? So this is what it is, extremely liquid.