| ARMSTICE DAY…ALL QUIET ON THE WESTERN FRONT THE DAILY RECKONING BALTIMORE, MARYLAND
THURSDAY, NOVEMBER 11, 1999
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In Today's Daily Reckoning:
*** The final spike? Techs and Nets keep going up…
*** Gold rises strongly…
*** Jules meets the president of France * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *** The Nasdaq continued to spike upwards yesterday. But the techs and Nets in
the Nasdaq left the rest of the market far behind. The Dow fell 19. *** As has been the pattern, there were 69 new highs…118 new lows. *** The biggest IPO in history was UPS's offering yesterday…at $5.47 billion.
The stock rose from $50 to $67. UPS is a "rubber meets the road" company that may
benefit from the Internet era…without suffering the creative destruction in the
Internet stock sector. But it is not cheap. *** Gold and oil both rose yesterday. Gold was up big -- to $299. And oil was at
a three-year high…$24.50. The underlying inflation indicator, released
yesterday, showed the dollar losing half its value every 20 years. Hmmm…this
increases the likelihood of another rate hike next week. *** "The money is flowing out in a virtual torrent," says Richard Russell.
"Adjusted Monetary Reserves are booming." Russell believes that Greenspan is very
worried about Y2K and is increasing the money supply as a precaution. *** "The market has discounted most if not all of the effects of tobacco
litigation," says Dan Ferris, "Real Asset Investor" editor, guitar player and
non-smoker. He recommends Philip Morris, with its 7.5% dividend yield, as a good
bear market investment. http://www.realasset.com *** Want to buy an Internet stock? Lynn Carpenter thinks she's found one that
makes sense…a 150-year-old company that is making money…and will make more
money with the help of the Web. Lynn, by the way, noted that creative destruction
has already claimed the first Internet bookseller, Books.com. It was founded in
1994 and folded this week. Amazon is still in business, but only because it has
had a lot more money to lose. For information on the "Fleet Street Letter," in the U.S. call 1-800-433-1528 or
from outside the U.S. call 410-234-0691. Ask for code 3472. *** The French stock market is now bigger than the German market. And it just hit
its ninth successive new high. France is enjoying a wave of high spirits. *** This morning, my son, Jules, 11, attended a parade down the Champs-Elysee,
marking the anniversary of the end of WWI. Jules had been invited by his friend,
Xavier, whose father is a colonel in the paratroopers. Thanks to the connection,
Jules got to shake the hands of both the parliamentary leader, Lionel Jospin, and
the President of the republic, Jacques Chirac! More below… *** Speaking of madmen…we've had a run in on occasion with Lyndon LaRouche's
zombies. They picketed our offices in Baltimore a few years ago. This did not
particularly concern me at the time…but I worried about their safety. Baltimore
is bucking the national trend…its murder rate is still rising! *** What stirred the LaRouchies to life was our publication, "Strategic
Investment," of which Lord Rees-Mogg is co-editor. They say they believe that
Lord Rees-Mogg is involved in a conspiracy with the Queen of England to destroy
America by distributing drugs. In fact, they allege that the Queen was behind the
Oklahoma City bombing…a plot to stir up trouble with Mexico (they may not be
aware that Oklahoma is a long way from Mexico in more ways than one). Someday we
may learn where these loonies get their funding… * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
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ALL QUIET ON THE WESTERN FRONT "Like a wet, furry ball they plucked me up…"
Rupert Brooke In August 1914, millions of young men began putting on uniforms. These wet, furry
balls were plucked from towns all over Europe…put on trains and sent towards
the fighting. Back home, mothers, fathers and bar owners unrolled maps of so they
could follow the progress of the men and boys they loved…and maybe even trace,
with their fingers, the glory and gravity of war. I found one of those maps…with the front lines as they were in 1916 still
indicated… rolled up in the attic of our house in France. I looked at it and
wondered what people must have thought…and how horrified they must have been at
what happened. It was a war unlike any other the world had seen. Aging generals…and young
military strategists…looked to the lessons of the American war between the
states…or the Franco-Prussian war of 1870…for clues as to how the war might
proceed. But there were no precedents for what was to happen. The world had
embraced a new paradigm. People were already very familiar with the promise of the machine age. They had
seen it coming, developing, building for a long time. They had even changed the
language they used to reflect this new understanding of how things worked. In his
book, "Devil Take the Hindmost," Edward Chancellor recalls how the railway
investment mania had caused people to talk about "getting up steam" or "heading
down the track" or "being on the right track" or "getting rolling." All of these
new metaphors would have been mysteriously nonsensical prior to the Industrial
Age. The new technology had changed the way people thought…and the way they
spoke. World War I showed the world that the new paradigm had a deadly power beyond what
anyone expected. At the outbreak of the war, German forces followed von Schlieffen's plan. They
wheeled from the north and drove the French army before them. Soon the French
were retreating down the Marne Valley near Paris. And it looked as though the
Germans would soon be victorious. The German generals believed the French were broken. But there was something
odd…there were relatively few prisoners. An army that is breaking up usually
throws off lots of prisoners. Nevertheless, rather than take nearby Paris, they
decided to follow the French army, retreating adjacent to Paris, in the hopes of
destroying it completely. As it turned out, the French army had not been beaten. It was retreating in good
order. And when the old French general, Galieni, saw what was happening…the
German troops moving down the Marne only a few miles from Paris…he uttered the
famous remark, "Gentlemen, they offer us their flank." Galieni attacked. The Germans were beaten back and the war became a trench-war
nightmare of machine guns, mustard gas, barbed wire and artillery. Every day,
"The (London) Times" printed a list of casualties. When the generals in London
issued their orders for an advance…the list grew. During the battle of the
Somme, this list got longer and longer. Soon there were pages and pages of names. By the time the United States entered the war, the poet Rupert Brooke was already
dead, and the life expectancy for a soldier on the front lines was just 21 days. And the people back at home got the news…the telegrams…the letters. The
church bells rang. The black cloth came out. And, gradually, one by one, the maps
were rolled up. The fingers forgot the maps and clutched nervously at crosses and
cigarettes. There was no glory left…just tears. In the small villages of France hardly a family was spared. The names on the
monument in the center of town…to "Nos Heros…Mort Pour La France" record
almost every family name we know -- Bremeau, Brule, Lardeau, Moreau,
Morliere,Demazeau, Thollet…the list goes on and on. There was a bull market in
death that did not end until November 11, 1918…at 11 a.m. For years after…at 11 a.m., even in America, people stood silently…recalling
the terrible toll of four years of war. Now it is almost forgotten. We have a new paradigm now. It, too, is full of promise. It has already changed
the language we use…and is changing, like the railroads, the world we live in.
We think differently, too…using the metaphor of free-wheeling, fast-moving,
networked technology to understand how the world works. We are fascinated by the new technology…it is the Eiffel Tower for the end of
the century. We believe the new paradigm will help us create vast new
wealth…and a quality of life never before possible. And yet, we are still wet, furry balls, too. I will observe a moment of silence
at 11 a.m. Bill Bonner P.S. The effects of WWI lasted a long, long time. In the 1980s, my father got a
small inheritance from his Uncle Albert. "Uncle Albert?" I remember my father
saying. "Who's Uncle Albert?" The man in question was indeed an uncle…but he
had been forgotten for many years. A soldier in WWI, Albert had suffered a brain
injury from an exploding bomb…and never recovered. He spent his entire adult
life in a military hospital. | 
