He really believes Islam would beat the west. It might seem ridiculous, but he figures if he can polarize the world into Islam and the West, he's got a billion soldiers. If the west wreaks a holocaust in those lands, that's a billion people with nothing left to lose, that's even better from Bin Laden's point of view. He's probably wrong, in the end the West would win, whatever that would mean, but the war would last for years and millions would die, not just theirs but ours. Bin Laden does.
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