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An Extraordinary
Interview with
Richard Maybury

By Pat Gorman
Resource Consultants
January 4, 2010

Extracted from a lengthy interview by Pat Gorman in the January 2010 issue of the Resource Consultants Newsletter, Mr. Maybury restates and emphasizes his most important concepts from the past 20 years -- more important now than ever to the careful investor.


PAT:  Mr. Maybury, welcome back.  Since we last talked, events have certainly gone in directions you forecasted.  Some investors say you are clairvoyant.

RICHARD MAYBURY:  (Laughing)  Well, they’re wrong, I’m not, I’m just lucky.  But I do research, too, and try to have a long-term perspective.

PAT:  To you, long term means 2,500 years.  Perhaps that’s why Ron Paul says he looks forward to reading every issue of your Early Warning Report.  We have a lot to cover, so let’s get right to it.  You are one of the few investment analysts in the world who ties geopolitics, history and military affairs into economics and investing.  The most recent feather in your cap was the October 19th article in Newsweek about your Chaostan model. 

RICHARD MAYBURY:   Yes.  We’ve heard rumors for years that my newsletter is copied and circulated under the table in the Pentagon, CIA, NSA, FBI and so forth.  Apparently, according to Newsweek, the rumors are true, at least for the Pentagon and CIA.

PAT:  What happened?

RICHARD MAYBURY:   In 1992, I coined the term Chaostan for the area from the Arctic Ocean to the Indian Ocean, and Poland to the Pacific, plus North Africa.  That’s the most important area that never developed political or legal systems based on the two laws that make civilization possible.

PAT:  These laws are…

RICHARD MAYBURY:   Do all you have agreed to do, which is the basis of contract law, and, do not encroach on other persons or their property, which is the basis of tort law and some criminal law.  These are the principles on which the Declaration of Independence and Constitution are based, especially the Bill of Rights.  After the American Revolution, these ideas began to reach around the world, but their spread was cut short by the rise of socialism in the mid-1800s.  Chaostan — the land of the Great Chaos — is the area that never received these principles.

PAT:  They are the two laws taught by all religions?

RICHARD MAYBURY:   Right.  Chaostan has always been a vast sea of blood and destruction because its legal and political systems are not based on those two laws.

PAT:  In 1992, and many times thereafter, you warned that Washington should sever all political and military connections with Chaostan because if it didn’t, we’d be sucked into the chaos.

RICHARD MAYBURY:   No one in Washington wanted to hear that, so now we are in the economic and military madness up to our eyeballs.

PAT:  Then in October, the commander in Afghanistan, General McChrystal, gave a speech, and afterward he used the word Chaosistan, which is a slight misspelling of Chaostan.

RICHARD MAYBURY:   Yes, I suspect the misspelling was to avoid copyright problems.

PAT:  Newsweek investigated this, asking how McChrystal came up with this word.

RICHARD MAYBURY:  McChrystal’s aides told Newsweek it was from a speech I gave at the New Orleans Investment Conference in 1998, titled “What is Chaostan?”

PAT:  I remember that 1998 speech.  All during the 1990s, on my radio show and in this newsletter, I was drawing attention to your warnings about Chaostan.

RICHARD MAYBURY:   Yes, you were one of the first, and you deserve a big thank you from the investors who listened to you.  They earned a fortune from the shifts in the investment markets that have resulted from the war.

PAT:  Not the least of which is the economic catastrophe we’re in now.  You call it the Great Monetary Calamity.  As you predicted, the government paid for the war by creating dollars out of thin air, and this undermined the value of the dollar worldwide, and drove up prices of gold, silver and platinum.

RICHARD MAYBURY:   True, but we’re getting ahead of the story.  McChrystal’s aides said the word Chaosistan came from a CIA report prepared by a “red team,” of CIA analysts, who apparently changed the spelling of the word.  We don’t know what is in the CIA report, it’s secret, but the description given to Newsweek by two intelligence analysts in 2009 sounds a lot like material in Early Warning Report in the 1990s.

PAT:  (Laughing)  So Newsweek caught the CIA with its hand in Richard Maybury’s cookie jar.

RICHARD MAYBURY:  (Wry smile.)  Apparently so.

PAT:  What happened after McChrystal’s public use of the word?

RICHARD MAYBURY:   The whole foreign policy establishment including the Pentagon and Oval Office split in two.  One faction says the U.S. should continue trying to convert Afghanistan into a unified nation under a western-style democracy.  The other, apparently influenced by my Chaostan model, says, forget nation-building, it’s hopeless, just go after the terrorists.

PAT:  So you are the man who forced the Pentagon and Obama to face the truth Washington has been trying to ignore since 9/11.

RICHARD MAYBURY:   It seems so.

PAT:  Can you summarize this truth?

RICHARD MAYBURY:   It boils down to this:  there are no Patrick Henrys or James Madisons in Afghanistan or anywhere else in Chaostan.  The people in that part of the world do not have the heritage we do — they think differently — and the more we try to force our ways onto them, the more they hate us and support the Taliban and Al-Qaeda.  Again, those people think differently.

PAT:  So any government we install in Iraq or Afghanistan will, sooner or later, become their kind of government, not ours, because they are not us.

RICHARD MAYBURY:  Yes!  Very well said!

PAT:  What do you think of Obama’s December 1st decision to send more troops to Afghanistan to prop up the Afghan government?

RICHARD MAYBURY:  Obama has sided with the build-a-new-nation faction instead of the just-go-after-the-murderers faction.

PAT:  Where do you think this will lead?

RICHARD MAYBURY:   Among other things, to more economic chaos inside the U.S.

PAT:  Explain.  Does this have something to do with the New Axis?

RICHARD MAYBURY:   Yes.  New Axis is a term I coined in 1996, harkening back to the Axis in World War II.  It refers to Washington’s current enemies — the governments of Iran, North Korea, Libya, Syria, China, Sudan, Serbia and groups in Russia, Pakistan, Afghanistan, and elsewhere.

PAT:  Is that where George Bush got his idea for the Axis of Evil in 2002?

RICHARD MAYBURY:   (Another wry smile.)  Some think so.

PAT:  Do you believe the government plagiarizes your work for secret uses, and won’t tell anyone because for forty years you’ve said the democratic and republican leadership is crazy and crooked?

RICHARD MAYBURY:  Could be.  The important point for investors is that for Americans the war is a problem, but for the New Axis it’s a solution.  The New Axis is undoubtedly delighted to see the U.S. trapped in the Iraq and Afghan tar pits, and if Washington tries to withdraw, the New Axis will undoubtedly hit us again to sucker us back in.

PAT:  So, let me guess, the costs of the war will continue growing, and so will the printing of dollars.

RICHARD MAYBURY:   We’d be fools to be certain, but that’s the way to bet. To pay for the war, more greenbacks will be printed, the value of the dollar will continue falling, and profits in non-dollar assets will continue growing.

PAT:  Non-dollar?  Define please.

RICHARD MAYBURY:  Value not tied to the value of the dollar.  Bonds and bank CDs, for instance, are tied.  Gold, silver, platinum, real estate, oil, classic cars, art, Swiss francs and Rio Tinto stock are not tied; their values can rise when the dollar falls.

PAT:  Let’s get more deeply into the economics of the chaos.

RICHARD MAYBURY:   Okay.  Printing of dollars to cover future war spending will come on top of the inflation of the money supply that’s already happening to end the recession.

PAT:  Elaborate.

RICHARD MAYBURY:   Normally the U.S. banking system stays completely “loaned up,” meaning all the cash the banks are legally allowed to loan out is in fact loaned out.  Only about $2 billion total sits in U.S. banks unused.

PAT:  But these aren’t normal times.

RICHARD MAYBURY:   Right.  To stop the recession, the government has injected a mountain of new dollars into the banking system.  But the bankers are afraid to lend it, so most of the mountain is still sitting there in the banks.  Little of it has flowed out to the general economy.  Yet.

PAT:  How big is this mountain of dollars?

RICHARD MAYBURY:   Take a deep breath, this will sting.

PAT:  I’m ready.

RICHARD MAYBURY:   As I said, the normal amount of unused dollars in the banks is about $2 billion. The amount that’s in there today is a trillion. 

PAT:  (Coughs) How much?

RICHARD MAYBURY:  A one followed by twelve zeros.

PAT:  Just sitting there waiting to be poured into the economy?

RICHARD MAYBURY:   Right.  When bankers become confident enough to start lending again, this mountain of dollars will likely avalanche into the economy, and the value of each individual dollar will dive.

PAT:  I’d like to get into that further, but we have so much else to cover.

RICHARD MAYBURY:  No problem.  I’m doing an explanation in the January 2010 Early Warning Report, complete with pictures, so that it’s easy to remember.

PAT:  Excellent.  How big is the military spending problem?

RICHARD MAYBURY:  First, let me be clear about something.  I am not predicting the end of America.  I’m predicting the end of the federal government’s empire.  When the French empire ended in the 1960s, did France disappear?  When the British empire died, did Britain die?  In fact, both countries are much better places today, without their grossly expensive empires.  America will be the same, but getting from here to there will continue being tumultuous for many years.  Americans will adapt, with difficulty, just as the British and French did.

PAT:  Some say Washington doesn’t have an empire.

RICHARD MAYBURY:   They’re naïve.  The whole US military has been converted into an offensive force, not a defensive one.  It’s scattered all over the world, in more than 100 countries, training and equipping the armies of crooks and tyrants who claim to be pro-US.  These regimes use this training and equipment to fight the rebels who try to overthrow them.

PAT:  Examples?

RICHARD MAYBURY:  Mubarak in Egypt, the Saudi rulers, the Kuwaiti rulers, Putin in Russia, Zardari in Pakistan, Karzai in Afghanistan, Ahmed in Somalia, and many others.  Even Saddam Hussein, Osama bin Laden and Manuel Noriega were recipients of US military aid. 

PAT:  Surely you jest.  Putin?  Saddam?  Bin Laden?

RICHARD MAYBURY:  Yes.  And all the pet tyrants on the US payroll have enemies, so now their enemies are our enemies.

PAT:  Insane.

RICHARD MAYBURY:  It certainly is.  In April 1997, Washington sent Green Berets to train the army of Sierra Leon.  The next month, Sierra Leon’s army overthrew the  government.  The Green Berets ended up risking their lives to defend Americans in Sierra Leon against the very troops they had been training.

PAT:  So the U.S. Empire is another federal boondoggle.

RICHARD MAYBURY:  (Laughing)  Of course it is.  Just like the British empire, French empire and all the rest.  The rulers who receive our money are our friends, they love us, until someone makes them a better offer. 

PAT:  This is awful.  You are saying the Defense Department isn’t really defending Americans, it’s defending the US empire, meaning these thugs that are on the US payroll?

RICHARD MAYBURY:  Yes, and to do that, the armed forces are spread very, very thin.  Over all, the American military today is about half the size it was in 1990.

For instance, the military has five branches.  The Army is the main force and by far the largest.  It has about 550,000 active duty personnel.  Of these, 255,000 are deployed in about 60 countries. 

PAT:  That’s a lot, but it does leave about 300,000 to protect America.

RICHARD MAYBURY:  No.  Military planners refer to the “tooth-to-tail” ratio, meaning the number of troops deployed in combat areas versus the number in training, transit, ill, resetting equipment, shipping supplies, and doing all sorts of other things.  Of the Army’s 550,000 active duty personnel, only about a third are the teeth, available for deployment and combat.  The rest are occupied with other things.  So, in effect, there is no one to defend America.  Our troops are spread all over the world protecting the kinds of people you would not want to meet in a dark alley.

PAT:  Why does the government do this?

RICHARD MAYBURY:  Beats me.  All we know is that political power corrupts the morals and the judgment.  History teaches no clearer lesson.

PAT:  You have personal experience with this empire building?

RICHARD MAYBURY:  When I was in the Air Force in the 1960s, I was stationed in Central America, working with the CIA’s School of the Americas, training the troops of Washington’s pet rattlesnakes.  The morale in my squadron went to pieces when the troops figured out that we weren’t defending our country, we were helping prop up Washington’s crooks and tyrants.

PAT:  But aren’t these crooks and tyrants pro-American?

RICHARD MAYBURY:  I don’t know, I’m not a mind reader.  They say they are.  They certainly love the weapons and military training you and I are buying for them.  And, their enemies hate us for it.

PAT:  So, you’re saying that ever since WWII, the federal government has spread our tax money around so lavishly that it has made legions of friends and hordes of enemies, and it can’t tell them apart?

RICHARD MAYBURY:  That’s about the size of it.

PAT:  Getting back to your point about the military being spread thin.  How thin?

RICHARD MAYBURY:  When I was a boy, America had an aluminum roof.  Almost any clear day, I could stand outside my home and watch jet fighters fly over.  Some days we could see whole squadrons in formation.  Now that’s all gone.  When was the last time you saw a squadron of jet fighters fly over your house?  A person under age 50 has probably never seen it and has no idea what it feels like to be that well protected.  America’s huge defensive fighter cap no longer exists.

PAT:  It’s gone?

RICHARD MAYBURY:  Almost.  In the recent Pentagon budget, the F-22 jet fighter program was cancelled.  The F-22 is the current air superiority fighter.  It’s termination means the government is de-emphasizing air superiority.

PAT:  Air superiority?

RICHARD MAYBURY:    Winning a war is always about taking real estate.  You try to throw the enemy off a given location, and put your own troops on that spot.  This means, at bottom, war is about infantry. 

PAT:  Infantry.  Ground troops.

RICHARD MAYBURY:  Yes.  You really only own the land your infantry is standing on.  Everything in your strategy and tactics is ultimately focused on making the infantry successful.  The navy, coast guard, air force, satellites, nuclear missiles, all of it is, in the final analysis, support for the infantry.  It’s all dedicated to putting a soldier with a rifle on a piece of ground and keeping him there.

PAT:  And the air superiority fighter is important how?

RICHARD MAYBURY:  All through history, those who have owned the high ground have had the advantage.  That’s why, wherever possible, castles were placed on hilltops. 

The sky is the ultimate high ground.

Typically an air umbrella is layered something like this.  Near the surface are helicopters.  Between, say, 1,000 feet and 5,000 feet are ground attack aircraft.  At around 30,000 feet are bombers, cargo planes and air-refueling tankers, and just above them, on top, is fighters hunting enemy fighters. 

If the air superiority fighter cannot keep enemy fighters away, the whole umbrella will be shot out of the sky.  Then the infantry on the ground will be digging for their lives instead of moving forward.

A military can scrimp on ships, bombers, trucks and everything else, but not air superiority fighters.  For those, it must have the very best, because the nation with the second best loses.

For the U.S., most of the air umbrella is old and/or worn, and in need of replacement, because the money to keep it updated was spent in Iraq and Afghanistan.

PAT:  We are back to the subject of money again.  I think I can see where this is going.  How many F-22s do we have?

RICHARD MAYBURY:  When I was a boy in the 1940s and ‘50s, the top air superiority fighter was the F-86 Sabre and its variants.  Almost 10,000 were built.  Today, for several decades, the Pentagon’s top fighter has been the F-15.  Only 1,138 of these were built, and now, after 37 years, the F-15 is near being eclipsed by planes made in Russia and China.

The replacement for the F-15 was supposed to be the F-22.  But the government is so short of money it plans to buy only 187.

PAT: 187!  I don’t know what to say.

RICHARD MAYBURY:  That’s what US foreign policy has been like for decades.  Our real defenses, such as those thousands of preeminent jet fighters that once filled our own skies, have been whittled away in order to free up money to build this global empire that only a Machiavelli could be proud of.

In other words, U.S. officials are allowing superiority in a large war to gravitate to Russia, China or any other major power that chooses a conventional Big Iron fight, because they’re spending the money on the empire.

That’s not just my opinion.  The October 12th 2009n Defense News quotes a top military analyst who reports, “the Army is relinquishing its focus on fighting a heavily armed adversary.”

PAT:  Horrifying. 

RICHARD MAYBURY:  The federal government certainly does put the fun in dysfunctional.

PAT: The economic and financial implications?

RICHARD MAYBURY:  War is the most expensive thing humans do.  The decision to continue both the empire and the endless guerrilla war means printing more dollars to pay for them.

PAT:  It seems to me that the New Axis understands all this and will try to take advantage of it.  They surely have some kind of big military crisis in the works, and when it happens, Washington will launch a crash program to rebuild our defenses for a Big Iron fight.

RICHARD MAYBURY:  That’s a very astute reading of the situation.  U.S. officials will pay for this crash program by printing even more money.  And, the New Axis knows this, which is very likely another reason Russia, China and the others are trying to bail out of U.S. dollars.

PAT:  Mr. Maybury — Rick — we’ve been friends for decades, and ever since the Berlin Wall came down, I’ve been watching you help your readers cope and profit from the chaos.  The world is changing so dramatically, and in so many ways you predicted, that yours must be one of the most fascinating jobs ever.  You must be on the edge of your seat all day long.

RICHARD MAYBURY:  Pat, as you know, my dear wife of 42 years works in the business alongside me; her office is right next to mine.  A few weeks ago I asked her if she knows of anyone who has ever had a job as exciting as ours.  She said Evel Knievel.

PAT:  (Laughing)  This endless parade of catastrophes is taking a toll?

RICHARD MAYBURY:  Only on our health and sanity.

PAT:  I looked up the word anxiety in the dictionary.  There was no definition, just a picture of you and your wife.

RICHARD MAYBURY:  (Laughs.) 

PAT:  Back to business.  During the past year, you’ve written many revealing Early Warning Report articles.  One of my favorites is the four-part explanation of economic models.  You point out that the model used by a person’s investment advisor or broker is the single most important factor in deciding if the person will be broke or rich.  

RICHARD MAYBURY:  Yes, there are five main macroeconomic models, the monetarist, Keynesian, Austrian, socialist and fascist.  For long-term buy-and-hold investing, the model your advisor uses is almost the whole ballgame in determining what results you will have.  The model isn’t very important for short-term hit-and-run speculation — so-called technical analysis is better there — but for the long run, say a year or more, I think the economic model is 90% of the game.

PAT:  I liked your remark about Keynesianism.  You said the government uses Keynesianism to control the economy, so if your financial advisor uses Keynesianism, then it’s reasonable to expect your investments to end up in the same condition as the economy.  You asked, do you want that?

RICHARD MAYBURY:  No one ever tells investors to look for advisors and brokers who use a good economic model.  The government uses Keynesianism, so most financial professionals do, too — that’s what’s taught in the colleges, and…

PAT:  …and that’s why during the past decade millions of investors have been devastated.

RICHARD MAYBURY:  Exactly.  They’re all using the same crazy model as the Federal Reserve and Treasury because, again, that’s what’s taught in college.  And, incidentally, my series of articles about models is in five parts, not four.  The fifth installment, which is titled “Why did Keynes do it to us?” will be in the February issue of EWR.

PAT:  As I remember, Keynes called gold a barbarous relic. 

RICHARD MAYBURY:  Yes, and for people who already own gold, this creates a wonderful opportunity.  Most Americans have yet to discover the precious metals — they’ve been taught by Keynesians to ignore them — so when they do discover them, look out.  I think the absolute floor on gold will be $3,000 and I would not be surprised to see $5,000 or more.  Same for platinum.  For silver, I’m looking for $50 at a minimum.

PAT:  Your readers have already done spectacularly from these metals.

RICHARD MAYBURY:  True.  Resource Consultants was one of the first companies to draw attention to Early Warning Report, so you are aware that I told my readers in March 2000 that a big war was coming and it was time to get into investments that do well in wartime.  That included gold, silver and platinum, because, I said, the government would pay for the war by printing dollars.  As the dollar falls, precious metals rise.

PAT:  Which they certainly have.  On 9/11, the MZM measure of money supply was $5.3 trillion, and today it is $9.6 trillion.  I remember you said something about a military buildup being the trigger for this catastrophe.

RICHARD MAYBURY:  All during the 1990s, Washington was dismantling the armed forces.  In March 2000, I said that the end of the drawdown was near, and Washington’s enemies would strike shortly thereafter, because they could be confident they were catching the U.S. at its weakest. 

PAT:  On June 22, 2001, Bush announced a reversal of the drawdown, and less than three months later, the World Trade Center was destroyed.  It was a perfect call, and the profits for your readers have been breathtaking.  On 9/11, gold was $271, silver was $4.18 and platinum $443.  As we go to press, gold has been $1,220, silver $21 and platinum $2,280. 

RICHARD MAYBURY:  I’m sure Keynes is spinning in his grave.  I’m also highly confident this is only the beginning.  In its obsession with Keynesianism, the Federal Reserve has gone wild printing greenbacks.  In 2009, the whole world began again moving away from the dollar, and into all kinds of non-dollar assets, with gold, silver and platinum leading the pack.

PAT:  Aren’t you exaggerating?  Have U.S officials really gotten that carried away?

RICHARD MAYBURY:  Go to the web site of the St. Louis Federal Reserve, and check the Monetary Base chart.  The Monetary Base is the raw material from which the money supply is made.  That’s the most frightening financial chart you will ever see.  It screams, get out of dollars and into precious metals!

PAT:  But people who are trained in Keynesianism have been taught to ignore the money supply.  The old Keynesian line is, money doesn’t matter.

RICHARD MAYBURY:  Right.  An investor must go out on his own to learn about better models, as well as a lot of other things the government and mainstream press don’t understand or don’t want us to understand.  

PAT:  You’ve said the Federal Reserve will get us into more wars.  

RICHARD MAYBURY:  Yes, that’s a point you won’t hear from the mainstream media. By driving down the value of the dollar, Fed officials are depreciating not only the savings of Americans but the savings of millions of others in foreign countries who hold dollars.  In other words, this crazy Federal Reserve monetary policy is making us a lot more enemies.

Bear this in mind:  In 452, when Attila the Hun hit the Roman city of Aquileia in Italy, the Roman army was stationed all over the empire, in Gaul and elsewhere.  The troops could not get back to Italy in time to protect their own homes and families.  Aquileia was wiped out.  Today, eight years after the Twin Towers were hit, Washington still has far more military forces in Korea than in New York.

PAT:  We’ve got the picture, more chaos.  Back to economics.  Tens of millions of Americans were financially devastated in the 2000 crash and the 2001 recession, and again in 2008.  But your subscribers have sailed through all of this with amazing profits.  What are you doing right?

RICHARD MAYBURY:  (Laughing)  I’m being very lucky.  Seriously.  The study of investments, economics, geopolitics and related subjects is the study of human behavior, and humans are flaky; they have free wills and they change their minds.  We at Henry Madison Research do our best, but we aren’t miracle workers, luck plays a big part.

PAT:  Okay, sure, we understand that, but you clearly have an edge.  What is it?

RICHARD MAYBURY:  My military experience helps, but mostly it’s the Austrian economic model we use.  Austrianism has been a lot more right than Keynesianism.  It’s not perfect, but as far as I know, it’s the best.  Keynesianism has been slowly, quietly setting the world up for catastrophe ever since Keynes produced his General Theory in 1936.

PAT:  So this mess has been building since 1936?

RICHARD MAYBURY:  Actually since the Federal Reserve began operations in 1914, but Keynes turbocharged it.  From 1914 to publication of Keynes’ General Theory in 1936, the money supply was increased roughly 3-fold, and from 1936 to today, roughly 57-fold.  My key point is that the chickens have finally come home to roost.  An investor can either surf this tidal wave of dollars — and any of my subscribers will tell you it’s a wild, rough ride — or you can be mowed down by it, as millions have.  Those are your only two choices. 

PAT:  And the investor’s economic model is the key determinant.

RICHARD MAYBURY:  Right.  I think the economic model you or your advisor use for your strategic planning is 90 percent of the game.  The model decides whether you will ride the wave to riches, or drown.

PAT:  And since nearly all financial people, including the honchos in the government, were trained in Keynesianism, we need to learn about the Austrian model ourselves.

RICHARD MAYBURY:  Yes.  It’s not difficult, the Austrians tend to be very clear and easy to understand.

PAT:  Please demonstrate.  Can you summarize the economics in this interview by telling us in just one paragraph what you think is going on, at bottom, in this economic crisis?

RICHARD MAYBURY:  Sure.  Under the influence of Keynes, in 1971, after thousands of years of using gold and silver as money, governments completed their transition to fiat currencies.  Fiat currencies are created out of nothing, without limit.  Anyone who has even a slight understanding of political power has known this system could not last.  If governments were given the privilege of creating money out of thin air, they would go ape with it, and they have — like chimpanzees with a machine that cranks out bananas.  So we are in the beginning of the end of fiat currencies.  For years, the turmoil will be awesome, but so will the profits for those who understand.


Pat Gorman and RESOURCE CONSULTANTS are on the
EWR recommended vendors list for precious metals and coins.
Mr. Gorman can be reached at 800-494-4149.


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