The 9/11 Bubble

Here is more fiscal bad news. Add this with the earlier post Contemporary Thoughts: Pass the Buck -- The approaching financial catastrophe This may be the main issue in the 2nd W Presidency.

The very reason Mr. Bush had the luxury of launching a war of necessity in Afghanistan and a war of choice in Iraq, without a second thought, was because of the surpluses built up by the previous administration and Congress. Since then, the Bush team has been slashing taxes in the middle of two wars, weakening the dollar and amassing a huge debt burden - on the implicit assumption that nothing will go wrong in the future.

But what if there is another 9/11 or war of necessity? We're cooked. The tax revenue won't be there, so the only option will be more borrowing and a weaker dollar. But what happens if the Chinese and other foreigners, who now hold over 40 percent of our Treasury securities, decide they don't want to hold these depreciating dollars anymore, let alone buy more?

The Case for Not Attacking Iran

Well, it seems that Iraq is not enough. We now need Iran too. This is getting ridiculous.

Do the last few days remind you of anything, by any chance? Presidential heavy breathing about a ‘rogue’ Middle Eastern state; a supporting chorus of exiles with dramatic new claims; and a senior member of the US government bearing intelligence which turns out to be more spin than spine-chilling. Less than a month after the presidential election, the Bush White House has begun its campaign against Iran. In the week that Americans break for Thanksgiving, it might seem that, for Washington, the festival of the moment should really be Groundhog Day.

And it seems that it all was serendipity

According to Ken Pollack, the highly respected Washington Middle East analyst, Iran’s current status as a fully-fledged US hate-object is partly the result of an accident. Since the embassy hostage-taking in 1979, relations have not been warm. But there have been several attempts at rapprochement since. And, by Pollack’s account, Iran only ended up in President Bush’s famous ‘Axis of Evil’ speech as little more than ‘padding’. Bush’s speechwriters ‘had come up with this great line, and they needed a third country to make up an Axis’, he quotes one administration official as telling him.

However, we hope that Iran is in a better position than what Iraq was in.

In discussions with journalists and British officials over the last six months, Iran has discreetly made it clear that if it should be attacked, it has the power to turn the current mess in Iraq into a Lebanon-in-the-1980s-style calamity, and send a lot more men of the British and American armies back home in boxes. That is the main reason why the current policy of negotiation, coupled with threats from each side to make life difficult for the other, will probably continue for some time, however tough the rhetoric from Washington.

Condaliza Rice takes over as Secratary of State

Don't forget to smile.

US Downplays Report on Guantanamo Prisoner Abuse

This is a must read about Guantanamo.

It cited one common practice at Camp Delta, the main prison facility, which was applied to uncooperative detainees. They were forced to strip to their underwear, sit in a chair while shackled hand and foot to the floor, and then subjected to strobe lights and loud rock and rap music while the air-conditioning was turned to maximum levels.

Pass the Buck -- The approaching financial catastrophe

This is a very important article from Ludwig Van Mises Institute (a Libertarian Think Tank) . The dollar is steadily weakening against all other main currencies of the world. What is worse is that the original problem occured because of the supremacy of the dollar in the sixties and the world pegging their currencies on the dollar. The dollar at that time was backed with gold. When Europe started collecting the gold in the 60's, Nixon bet that if he would remove the gold standard, the dollar would still be sought after and the interest game would bring money into the US, without losing the gold.

Well that worked for a while....but the game looks like it is beginning to implode. You know the fake pyramid schemes of making money from nothing....this is at a world level.

Here are some excerpts from the analysis.

The post Second World War monetary architecture crowned the dollar as the world's reserve currency, tying it to gold at a fixed sum and all other currencies fixed against each other. Under this pseudo gold standard, America's central bank would convert dollars to gold on demand for foreigners. However, U.S. policy-makers assumed that gold redemption would fail to materialize and the Fed could inflate without sanction because foreign central banks would retain the dollars as reserves on which to pyramid their own currencies.

The system worked fine, as far as America was concerned, until the 1960s when European countries replaced an inflationary bent with hard money policies. Assailed by rampant inflation, the Vietnam War, and staggering trade and budget deficits, the U.S. hemorrhaged gold at an accelerated pace, prompting President Nixon to close the gold window in 1971. The de facto declaration of national bankruptcy heralded the advent of free-floating currencies and the present stage of the dollar standard.

No longer constrained by even the nominal fetters of Bretton Wood's pseudo gold standard, America has been able to purchase imports with fiat money churned out by the Fed and uniquely finance its burgeoning indebtedness by issuing debt instruments in dollars. On the other hand, foreigners, stuck with unconvertible greenbacks since 1971, have had no choice but to adopt dollars, rather than gold, as the world's reserve asset.

Consequently, the dollar standard, in both the fixed and floating variants, has fostered an unhealthy economic relationship whereby most major economies excessively rely on exports to the U.S. and then funnel the greenback receipts back into America's credit-hungry public and private sectors. Repatriated dollars seep into America's financial system, furnishing banks a broader monetary base to pyramid credit upon, which can fund more U.S. imports, thus perpetuating the world's vicious economic cycle.[i]

The article is a bit long but very interesting to read. If you don't want to read it, it should suffice to read the last two paragraphs.

To underscore the voracity of the dollar's impending demise, the 27 November Edition of the Financial Times furnishes a telling account published in its letter-to-the-editor section. The writer, who just returned from a business trip to Vietnam, recalls how when a 7-year-old street urchin asked him for money, the child refused his offer of a dollar, instead specifying euros.[vi]

A 100% gold standard, with its inherent price-specie-flow mechanism, would have precluded the tremendous accumulation of debt and annual trade deficits by America as well as the gross distortion of the international economy, whereby most major countries orient production toward exporting goods to America. As 50 years of the fiat dollar standard "boom" ends, the U.S. and the world will reap what they have sown.

The Victims of "Victimhood"

This is an article about honor killing in Jordan. However, it actually exposes made up stories and nonsensical issues with a recent book called "Honor Lost: Love and Death in Modern Day Jordan".

An excerpt

Khouri's hoax is a dramatic illustration of how harmful such gaping incredulity can be to real victims and honest dialogue. Malcolm Knox, Literary Editor of SMH, commented that Khouri "spent much of 2003 retelling this story, reducing listeners to tears and anger, in interviews, book festivals, bookshops and other events ... Khouri became a standard-bearer for oppressed Arab women and triggered a publishing trend of similar books."

Meanwhile, Sabbagh – a woman who has fought on the front lines for the real victims of honor killings – stated: "We feel defamed by this book." She feels defamed because Jordan has courageously opened up the topic of honor killings for global examination. Now the issue is being defined by sensationalized fiction, not reality.

Wendy McElroy concludes with

The sad Khouri saga is not an indictment of honor killings. It is an indictment of how society has so fallen in love with victimhood that it took 18 months and an international effort to debunk a claim that should have immediately collapsed of its own weight. But, then, that would have required asking a question.

US Foreign Policy Exposed

Here is an excerpt

In the past 100 years American foreign policy has become progressively more offensive, more militaristic, more expensive, and in every way, less republican, less constitutionally constrained, and with all that, imperial. The facts on the ground in terms of military spending (seven times the next closest spenders, China and Russia, and thirty times that of Iran, North Korea, and Syria combined), military reach (global), and general policies of interference (the U.S. "is the foremost user of economic coercion as a foreign policy tool") support Eland’s assessment that indeed, our foreign policy is beyond the pale and unsustainable. Several closet imperialistas in the neoconservative camp of both major parties, such as Max Boot of the Council on Foreign Relations and Victor D. Hanson of the Weekly Standard are frequently referenced. Even they seem to agree, ruefully at times, with the basics put forth in the book.

Thus, we have an empire, of sorts, impossible to pay for or to secure, and remarkably unguided by the kind of great ideas, kings and emperors we might read about or watch on the big screen. America has not been led to empire by some great shared vision or the ego of a larger than life leader. She has been cajoled, sweet-talked, lied to and made afraid whenever it was politically expedient, by bureaucrats and academics and ideologues who never knew war or else relished the fantasy of it.

And another one

In this important book, Eland has stripped the American empire for all to see. While it is admittedly painful, we must boldly direct our gaze at this undressed spectacle. The average American, like the clear-eyed innocent little boy in the Hans Christian Andersen story "The Emperor’s New Clothes," is completely capable of observing that in spite of what we are told by the echo chambers of administrations from Wilson to Roosevelt to Truman to Nixon to Bush 41, Clinton and Bush 43, in fact the American empire has no clothes. No profit, no richness, no honor, no loveliness, no good works or humanity. In pursuing empire for beautiful and glorious sounding reasons, in fact we have made America a laughingstock, and as a republic, she has grown scrawny and weak.

That Pre-9/11 Mindset

Sometimes the more things change, the more they stay the same.

Some quotes:

In 2000, for example – a year before 9/11 – the Mises Institute's Jon Basil Utley was predicting that the United States' disregard of international law was fueling a potential terrorist backlash. And the year before that, our own Lew Rockwell observed that thanks to its "foreign policy, imperial military reach, and global arrogance, the U.S. government is the most hated in the world," so it's "not surprising" that terrorists might "blame us for the actions of the government."

And even from Pat Buchanan

On the right, Pat Buchanan was asking in 1999:

With the Cold War over, why invite terrorist attacks on our citizens and country, ultimately with biological, chemical or nuclear weapons? … [B]attling terrorism must go beyond discovering and disrupting it before it happens and deterring it with retaliation. We need to remove the motivation for it by extricating the United States from ethnic, religious and historical quarrels that are not ours and which we cannot resolve with any finality.