Taken from Ron's speech at the May 2001 Global Investing for the New Millennium - Cradles of Civilization Cruise from Italy to Egypt, Turkey & Greece.

Although not mentioned today in the establishment news - much of the Middle East problems today stem from actions by European governments at the close of World War One with decisions made at the well known Treaty of Versailles. Thomas Jefferson described history best when he said, "History, in general only informs us what bad government is". This was certainly true in the Middle East during the early 20^th century.

I'll date the start of modern day Middle East conflict as beginning around 1914 with the beginning  of the First World War. Although the war was an accident caused by entangling alliances, economic competition and sparked by an assassination in the Balkans, then like now, this area of the old Austria-Hungarian Empire was a meeting point of three competing cultures and religions. This competition and conflict of Moslem, Eastern Orthodox religions and the the West made the area a flash point of world politics then as well as now.

The end of the war, described in Allied propaganda as "the war to make the world safe for democracy" and "the war to end all wars" was of course, nothing like the slogans and promises. Rather the Allied victory and the vengeful Treaty of Versailles created a power vacuum in the Middle East because the defeat of the Central Powers including Turkey destroyed the old Turkish Ottoman Empire that had ruled most of the area for hundreds of years.

In the war, Turkey sided with Germany and the Austria-Hungarian Empire and when they were defeated all of the Middle East formerly part of the Ottoman Empire became "up for grabs" as spheres of influence for the victorious Allied nations. . This is where many of the Middle East problems we face today began. The basically unfair Treaty of Versailles and distant, European politicians arbitrarily created the Middle East national boundaries we have today without any regard to local geography, tribal affiliations or national identity. This outside meddling in what should have been decided by the people and local power structure of course created discord, infighting and hatred between groups of people in these artificially created nation states.

So, how do politicians generally stay in power in this kind of artificial nation? They sadly tend to bind together populations with competing tribes, religious sects, customs, languages and power structures, through the hatred and fear of a common enemy of course. If they don’t have one they invent one. This is one reason for the Israel/Arab conflict among nations in the Middle East. Many of the Arab political leaders play this game outside of Israel to remain in power as Arafat does with the Palestinians inside of Israel. Political expediency and as a means for Arab politicians to stay in power are two unreported reasons for the continuing conflict in the Middle East. It is also important to remember that many Israeli politicians also play this game in their political process.  So, while the vast majority of all sides in the conflict would benefit economically and personally by peace, this wouldn't be good for most Middle East politicians.

Now the history books have of course covered up the imperialism and territorial land grabs with talk about the League of Nations mandates etc. But remember, all history is written by the victors or winners and about everything put out by the governments of France and England during this time is just so much government lies and propaganda.
Remember, any written history is just a viewpoint, often subsidized by the political establishment of a nation to make them look good and of course the former enemy appear bad and evil.  Think of history as a testimony in a divorce court or  the always differing accounts of an auto accident. If you only listen to one side, you usually will not get the complete story.

Today in May 2001, on the Global Investing for the New Millennium Cradles of Civilization Cruise, I want you to consider a few questions and answers about modern Middle East history that you probably haven’t heard before. Remember history and present day news are often distorted by politicians and the news media. It was the same during World War One and of course it continues today in the early months of the 21^st Century. To give you an idea about what I'm talking about, consider these questions:

(1)  What nation created the 2nd worst European holocaust in 20th century Europe? We all know the most deadly holocaust was the Nazi holocaust but what nation comes in second and what people was it directed against? The answer is Turkey against the Greeks. I'm talking about the Greek Holocaust of Thrace, Asia Minor and Pantos. For example, the Christian population in Turkey decreased from 4.5 million in 1900 to around 150,000 today. The number of Greeks living in Turkey fell from around 2 million to around 7,000 today. Actual victims were around 2.5
million including 1.5 million Armenians.

Why did this take place? After the First World War, the Turks who had lost Asia Minor, reoccupied the region. Then there was a war in the region between Greece and Turkey ending around 1921 that resulted in a partition of the region. About 300,000 Turks had to leave their homes in Greek territory and 1.4 million Greeks in Turkey that survived the holocaust had to also move back to Greece.

Now, let's don't get too tough on the Turks. As we Christians during the crusades did the same thing to Moslems in Turkey and throughout the Middle East. Our so called "Christian Crusaders" even laid siege and wiped out most of Christian Constantinople several times on their way to the Holy Land. By the way, this city is now Istanbul, Turkey where we will be visiting next week.

(2)  Since we are talking about Istanbul, what war time World War One leader was blamed for such a military disaster near this city, that everyone said his political career was finished, he was voted out of office and there was near unanimous belief that he would never hold office again? Who was it? Answer, Winston Churchill and the British Expeditionary Force invasion of Turkey and the subsequent Allied Defeat at Gallipoli made very famous in the Australian movie by the same name.

(3)  In what war was the most tonnage in bombs dropped by the US air force and your choices are Vietnam, WW 2 or Operation Desert Storm. Answer - Desert Storm  We have learned since the War with Iraq how little damage was done to the Iraq War machine by our air attacks as was the case recently in Serbia. 

(4) Now, let's talk about the "so called" Palestinian uprising today. What successful terrorist or freedom fighter example are the Palestinians following today in Israel? The answer is Menachen Begin, the Prime Minister  who led Israel during Jimmy Carter's Camp David Accords. Beginning in 1946, his underground forces made Palestine, a guerrilla war zone. They attacked the British police stations, kidnapped soldiers and attacked civilians. The British civilians in Palestine were forced to live behind armed compounds surrounded by fences and barbed wire. Does this sound familiar to how more and more Israeli civilians are being forced to live today?  Note, I am not saying this doctrine today will work against Israel because the British were occupying a distant Palestine while today's war is taking place inside the nation of Israel. Still the parallels are interesting and of course not lost on the leaders of both sides in the conflict.

(5) How many of you remember the terrorist attacks that blew up the marine barracks in Beirut, Lebanon during the Reagan Administration killing over 200 American soldiers. What was the 2nd worst terrorist attack in the Middle East? Answer In July 1946, Jewish freedom fighters blew up the British headquarters in the King David Hotel killing 91 and wounding 45. This action helped turn the tide of British public opinion against further British occupation of Palestine and led to the establishment of the modern day nation of Israel.

(6) What is the biggest obstacle to Israel giving up the entire West Bank (less Jerusalem) to the Palestinians? Answer - water as there is a major natural underground water reservoir there that provides Israel 50% of its agricultural water and 40% of the drinking water and all of it is located under the West Bank..

(7) What area makes up the modern day Middle East? The region of course includes: Egypt, Israel, Iraq, Turkey, Iran and the other Middle East entities plus some of the Moslem former Soviet Republics. Note that I said national entities rather than nations because except for Israel, most Arab peoples feel far more loyalty to their religion, local mosque and religious sect of Islam than to any nation state they might live in.

Thank you very much for your time and I'll be around to answer questions during the rest of the cruise and after my other two talks. Be sure to listen to my talk tomorrow on choosing an investment advisor.