By Doug Casey
January 27, 2024
International Man: Yemen has sometimes been called "the Afghanistan of the Middle East" because it is an impoverished tribal society that is well-armed, situated on mountainous terrain, and generally inhospitable to foreign invaders and a central government.
What are your impressions of this country?
Doug Casey: Regrettably, I haven't been to Yemen and have no plans on going-partly because I've seen enough similar flyblown Islamic hellholes. But it's well known that the country is extremely primitive, poor, tribal, and very religious.
Yemenis take their Mohammedanism quite seriously. No offense to believers, but the more primitive, poorer, and more tribal a place is, the greater the tendency for their lives to revolve around religion. It binds them together and gives their lives meaning. It is not a good place for foreigners of a different race, religion, or culture to invade. This begs the question, why would anybody want to invade it? There's nothing there of any real value. Maybe there are some undeveloped resources, but the natural resource business is high risk/high cost under even the best circumstances.
You certainly don't want to invest in a place with unfriendly natives. So, it's entirely insane for outsiders to care about Yemen.
It has been said that war is nature's way of teaching Americans geography. That's true. Not one American in a thousand even knew the place existed until a few weeks ago; now, they all have opinions on what "we" should do, even if they still can't find it on a map. But fear not. Even as we speak, plenty of reasons why we should care about Yemen are being fabricated in DC.
International Man: Yemen has long been a difficult place for foreign invaders.
Most recently, the Houthis, an Iran-backed group that controls most of Yemen, frustrated the military coalition of Saudi Arabia and its allies.
Though most people are unaware of this war or its details, it is remarkable that the Saudis, who are among the wealthiest in the Middle East and backed by the military and political support of the US, could not defeat the Middle East's most impoverished people in Yemen.
What is your take on the Houthi-Saudi Arabian conflict and its implications?
Doug Casey: I doubt if one American out of 10,000, or even 100,000, had even heard the word Houthi before last year, but now it's everywhere in the news. And for some reason, they've become our problem.
There used to be two Yemens-North Yemen and South Yemen-that were quite different politically and sociologically. They fought each other, then united in 1990. Now, the Houthis, who are Shia (hence the relations with Iran), are fighting a civil war with other locals. But it doesn't seem to me Yemen is or has ever been a real nation-state. It's impoverished, with no industry to speak of or the prospect of getting any. The income it has is from some oil production, and it all goes to corruption and paying the army. It has a large foreign trade deficit and debt. And the population is very young and exploding in numbers. It is, by any and every measure, one of the very most dysfunctional and essentially worthless places in the world.
It's almost always a mistake for foreigners to get involved in another country's civil war, especially when it has religious overtones. It doesn't matter which side you back; the people that you're backing are not your friends, and the people on the other side will really hate you. It's a no-win situation for the US. None of our business, with no upside. Except for US Government operatives who get to play bigshot.
International Man: Yemen sits at the gateway of the Bab-el-Mandeb, a strategic maritime choke point that gives the Houthis the ability to disrupt global shipping.
The Houthis have targeted Israeli-linked ships in the region in support of the Palestinians in Gaza. A US-led military coalition has started bombing targets in Yemen in response.
What do you think of the US intervention in Yemen and its direction?
Doug Casey: It's absolutely insane, pointless, and almost certain to escalate. Why, you might ask, is the US government bombing a primitive country on the other side of the world that has never done anything to us and poses zero threat?
The US is committing a giant war crime. Attacking a foreign country without provocation is a war crime. Furthermore, this adventure will fail for the same reason that the US lost in Afghanistan.
It's uneconomic to fight primitive people with modern weapons. Our million-dollar missiles blow up huts in the sand. At some point, some of their $10,000 missiles are going to get through and destroy a billion-dollar warship. The situation resembles what happened with Rome and the barbarians. The barbarians were a danger, but the more time that the Romans spent warring against them, the more technologies, strategies, and tactics the barbarians picked up from the Romans. There was nothing that the Romans could get from the barbarians. Except for the glory of killing lots of savages, it was a losing deal. But they had no choice. The enemy was at the gates, and they had to fight the invasion.
The US, however, is not being invaded, at least not formally. And certainly not by Houthis or other Yemenis. What's happening with the millions of aliens being subsidized to cross its southern border is a different question for another time.
The point is that it's foolish for the US to engage with these primitive countries not just because the pointless war adds to our bankruptcy bill while making millions of new enemies. But because we wind up either putting them on welfare, like the Ukraine, or involuntarily bequeathing them scores of billions of dollars of weapons, as the US did in Afghanistan.
The gateway to the Red Sea is a maritime choke point. It's important for the Egyptians, the Israelis, some Europeans, and the Chinese. If anybody is going to waste blood and capital while making enemies, it should be those people, not the US, which has absolutely no interest in the area.
It's essentially between the Houthis and Israel. It's certainly not our problem.
International Man: What geopolitical trends do you see shaping the Middle East and beyond in the months ahead?
Doug Casey: The Middle East will definitely be reshaped, but it's not ours to reshape.
Every country in the Middle East is an artificial construct, the same as every country in Africa. They were assembled arbitrarily in the drawing rooms of Europe in the last century. There was no thought about the language, culture, ethnicity, or political allegiances of the people in the area. These countries will all disintegrate.
"Syria," for instance, is no longer a country; it's only a region. It's become at least three or four different countries since the US fomented the civil war in 2011.
The same is true of "Libya," which is now two separate countries, although nobody mentions that. There's no reason why they should reunite.
Lebanon seems like one country, but Hezbollah runs substantial parts of the country, and the official government runs others. Not to mention numerous religious and ethnic groups that are all at each other's throats. It's not a real country anymore, although, at one time, it was the only Christian country in the Middle East. That's changed-permanently.
You can be certain that Iraq is going to break up into at least three countries-a Shiite, a Sunni, and a Kurdish part. "Iraq" didn't exist before 1920.
People in that part of the world take the religion of The Prophet (peace be upon him, as they say) very seriously. And they don't appreciate Christian soldiers running around trying to rearrange things any more than we would appreciate Mohammedan soldiers in the US or Europe.
International Man: What are the investment implications of everything we've discussed for shipping and oil stocks? Are there any other relevant investments?
Doug Casey: I own a very depressed shipping ETF with a low P/E and a high dividend yield. It's a speculation on the world remaining in one piece for a while longer. Should war heat up around the world, it could go even lower. Everybody may yet try to sink each other's container ships and oil tankers.
I remain bullish on oil and gas, if only for political reasons. Oil stocks are still quite cheap, especially those here in the Western Hemisphere-some are offering 10% dividend yields. Is that a sign of risk or value? Both. But mainly the latter at this point, in my view.
My favorite play on energy, though, is uranium, which has again crossed the $100 mark. I think it's going to go much, much higher for many reasons, on both the supply and demand side. There are relatively few uranium stocks out there and very few producers. The whole group is likely to explode upwards, as they did in the early 2000s.
And, of course, since gold is the only financial asset (along with Bitcoin) that's not simultaneously someone else's liability, I remain long gold. But mainly for safety and insurance. The very depressed gold stocks offer a high potential speculation.
Reprinted with permission from International Man.