I watch political and economic news with the hope of finding trends and preparing for them. I am also active on political issues and place bets (investments) on economic beliefs. I have been trying to make a buck and protect myself, in other words.
What I have noticed is a startling ignorance everywhere. This is unsurprising, given that the average person does not have the information nor the time to discover the information. I am, right now, avoiding work I ought to be doing to write this, for instance.
This ignorance is abetted by the constant barrage of information and disinformation in the various media. Some of this has been improved on the internet, if people are willing to correlate sources. However, the internet has also enabled anyone to post without doing adequate fact checking, as in this blog, where we strive to high-quality guesses. Of course, real news hacks seldom fact check anymore.
As a matter of fact, 'news' is often nothing more than whatever the AP, UPI, etc., are running. Other 'news' often is loaded with the reporter's bias, his editor's bias, and the blinders of the expected target audience. The reasons for this are myriad. Quite often, the reporter thinks he/she has a burden to improve the lot of mankind. Quite often, news media have financial pressures to respond to. Quite often the group the media is targeted to and responds to is insular. It is not necessarily clear that a given piece is a 'hit piece'.
I have made no secret about being a Ron Paul supporter. I have his yard signs. I am not quite aligned with him, I being anarcho-capitalist and he Republican paleo-conservative, but we're going the same direction right now. Nobody else except Dennis Kucinich appears to be even remotely close to where I stand, at least from the two major parties. If Ron Paul does not make it, I shall vote Libertarian as I have the last few elections, unless he runs third party or independent.
That being said, I obviously do not believe the years old newsletters are any big deal. Some of it is offensive, no doubt, but several people I've read have indicate that much of the stuff is out of context, much of the stuff is not that offensive, and all of it was not written by Ron Paul. Oh, well. I don't really care. At this point, a racist, offensive person who is capable of reigning in the federal excess is superior to a nuanced, careful politician who will only make things worse. With politicians, we have to pick and choose, looking for politicians that have what we need. That is why I support Ron Paul.
To me, however, it is interesting the amount of effort and ink being expended attacking Ron Paul's character, not on any real issues, but on some old newsletters. Then there is the insular nature of most Republican and Democrat communities, where someone says a half-truth and the megaphone of the discussion groups turns it into a lie. The most amazing untruths are being parroted as if so, such that Ron Paul is a socialist/leftist/statist that I just read at one of the emptier sites, an assertion that was left unchallenged due to the site restricting posting to members only.
I will close by simply saying that people need to determine what they wish to see in a government, then pursue that through their only means, voting. To do this, the voter must understand how a candidate actually stands on the issues. Otherwise, we, as a nation, risk being led by painted faces right down the garden path to servitude.
Wednesday, January 16, 2008
Monday, January 14, 2008
Economic Silliness
I have for some time now been a proponent of commodity-based money. Specifically, I am for 'free money', which means unregulated money, spontaneously issued, where the market decides which is acceptable and which is not. Under such a system, commodity-based money becomes the likely solution so that notes issued from any source are exchangeable so long as the source is trusted.
Now, the end of this is that we have, say, a gold-based currency circulating. Oddly enough, the primary argument I receive about this idea is that there is 'not enough gold in the world to cover the US economy'. This argument has been made by people otherwise quite intelligent, so seems to me to be based on a massive misunderstanding of money.
It is based on the idea that gold is currently priced correctly, but the relationship of money to gold is such that there is only enough gold in the world for a tiny percentage of the dollars out there at the current rate. This is the inherent value fallacy on first blush.
The inherent value fallacy holds that money has an inherent value. This is the primary fallacy on which economic redistribution plans are based. The idea is that a dollar is worth some irreducible amount and thus transferring a dollar from one person to another forcibly transfers that worth from one person to another. In a reasonably healthy economy, as any bank robber will tell you, this works. The reason is that the damage done by the transfer is small enough to not damage the system as a whole.
However, on a larger scale, we find that money is worth nothing more or nothing less than what people will give for it, just like every other commodity. Fiat money is confidence-based; it is worth what the receiver is confident he can get for it. Its primary value is that it is uniform, meaning each dollar is exactly the same as the next, so denominating in dollars makes it easy to make comparisons between choices.
But, if we forcibly transfer funds from one group of people to another, as our current economic system does all over the place, we devalue money itself. Those who consume do not produce as much as they consume while those who produce are not able to consume as much as they produce, leading to a disincentive to produce, as well as competition from non-productive factors for production. It is precisely this competition that leads to price inflation, which must be remedied with monetary inflation.
Now, gold is something that does have inherent value. It is a valued commodity, not a piece of paper, or worse, neatly arrange electrons. This means that gold does not lend itself to rampant monetary inflation. What this means is that fiat money stock has increased at a far raster rate than gold stock and hence the disparity between what money exists and how much gold exists.
Of course, there is really no problem; in order for gold to provide adequate backing for the dollar, gold merely has to increase in price relative to the dollar. Bad for the dollar, but good for holders of gold...
The next argument, smugly delivered, is that this means that the average citizen cannot afford an ounce of gold, if that ounce is now worth $1.2 million or whatever. This much is pretty obviously true, but the answer requires examining the common uses of money, which include currency, settlement and wealth preservation.
Currency is the most common use of money. This is trade. I receive dollars for my work and spend them for things I need. For currency, just about any script will do; it needn't be all that reliable of a money, as it only has to be redeemable as long as it takes for the retailer to redeem it. So, any bank should be able to emit notes based on gold that are redeemable when you pile enough of them together for some amount of gold. Otherwise, you simply use them to spend and acquire assets as you would dollars. In other words, for the common man, there really isn't any difference between a gold-based economy and a fiat-based economy when money is viewed as currency.
Settlement has been a common use of gold. At the end of the day, when international banks need to settle accounts, it is often easier for them to use a common value to settle with, and gold provides that. Essentially, each bank tallies how much it has been paid from another bank and how much it has paid the other bank, finds the difference and either bills the other bank that much in gold or pays it in gold. In a fractional reserve system, the actual use of gold for this is tiny, hence the low price of gold relative to the dollar. In a fully-backed world, the gold required would be much higher. This also does not affect the average man.
Wealth preservation, however, does, and here is where fiat money is truly pernicious. For starters, fiat money always declines in value over the long term because monied interests prefer it that way and the lumpen is in debt up to its eyebrows anyway, something inflation helps with, as each reduction in the value of the money causes a reduction in the amount they actually owe.
However, keeping money in those same dollars is not a good idea for precisely that reason, so people are driven to acquire assets and leverage themselves (borrow money) to buy more on the theory that money is cheap and easy to repay later. This means there is little money left for emergencies. There is also little money for opportunities. All of which means that insurance gets a larger share of the economy.
Another problem is that banks tend to make money no matter what the value of money in a fiat system because they can borrow at one rate and lend at another. This allows them to pocket the difference, which is making money. So, if they borrow money at 3% and lend it at 5%, even though money may lose half its value during the period of the loan, they still make the 2% in money that is now worth half what it was. However, they made that money not by working, producing value, or investing money; they made it by borrowing money that sourced from the fed, so was not backed by value, and loaning that, something nobody but bankers can do.
What this tends to do is make it hard for anyone but bankers to make money in investing. Bankers can borrow money at an artificially low rate, allowing them to invest for artificially low returns, often lower than real inflation, because they make money on the difference. The rest of us have to invest our real money, which means we lose money over the long haul, rather than make it. This is true of the stock and bond markets.
It is not, however, true of commodities, and this is where we see their scheme coming apart. The only bet the average investor can take short of being a sole proprietor or major partner in a business that does not allow outside investment, is in gold or silver, which are not investments in the normal sense in that they do not make money.
However, as fiat money decreases in price, its utility as a store of value will also decrease, driving more and more people to transfer fiat store into gold, silver, palladium and platinum, the traditional 'money metals'. This drives the value of the money metals up as it drives the value of the dollar down. However, the value of the dollar tends to decrease more slowly than the value of the money metals increases, causing those holding money metals to see the value they hold increase in purchasing power, meaning that during an inflationary crisis, money metals do qualify as an investment.
Now, were gold to become the currency, the increase in value of an ounce of gold purchased cheaply now would be truly staggering...
Now, the end of this is that we have, say, a gold-based currency circulating. Oddly enough, the primary argument I receive about this idea is that there is 'not enough gold in the world to cover the US economy'. This argument has been made by people otherwise quite intelligent, so seems to me to be based on a massive misunderstanding of money.
It is based on the idea that gold is currently priced correctly, but the relationship of money to gold is such that there is only enough gold in the world for a tiny percentage of the dollars out there at the current rate. This is the inherent value fallacy on first blush.
The inherent value fallacy holds that money has an inherent value. This is the primary fallacy on which economic redistribution plans are based. The idea is that a dollar is worth some irreducible amount and thus transferring a dollar from one person to another forcibly transfers that worth from one person to another. In a reasonably healthy economy, as any bank robber will tell you, this works. The reason is that the damage done by the transfer is small enough to not damage the system as a whole.
However, on a larger scale, we find that money is worth nothing more or nothing less than what people will give for it, just like every other commodity. Fiat money is confidence-based; it is worth what the receiver is confident he can get for it. Its primary value is that it is uniform, meaning each dollar is exactly the same as the next, so denominating in dollars makes it easy to make comparisons between choices.
But, if we forcibly transfer funds from one group of people to another, as our current economic system does all over the place, we devalue money itself. Those who consume do not produce as much as they consume while those who produce are not able to consume as much as they produce, leading to a disincentive to produce, as well as competition from non-productive factors for production. It is precisely this competition that leads to price inflation, which must be remedied with monetary inflation.
Now, gold is something that does have inherent value. It is a valued commodity, not a piece of paper, or worse, neatly arrange electrons. This means that gold does not lend itself to rampant monetary inflation. What this means is that fiat money stock has increased at a far raster rate than gold stock and hence the disparity between what money exists and how much gold exists.
Of course, there is really no problem; in order for gold to provide adequate backing for the dollar, gold merely has to increase in price relative to the dollar. Bad for the dollar, but good for holders of gold...
The next argument, smugly delivered, is that this means that the average citizen cannot afford an ounce of gold, if that ounce is now worth $1.2 million or whatever. This much is pretty obviously true, but the answer requires examining the common uses of money, which include currency, settlement and wealth preservation.
Currency is the most common use of money. This is trade. I receive dollars for my work and spend them for things I need. For currency, just about any script will do; it needn't be all that reliable of a money, as it only has to be redeemable as long as it takes for the retailer to redeem it. So, any bank should be able to emit notes based on gold that are redeemable when you pile enough of them together for some amount of gold. Otherwise, you simply use them to spend and acquire assets as you would dollars. In other words, for the common man, there really isn't any difference between a gold-based economy and a fiat-based economy when money is viewed as currency.
Settlement has been a common use of gold. At the end of the day, when international banks need to settle accounts, it is often easier for them to use a common value to settle with, and gold provides that. Essentially, each bank tallies how much it has been paid from another bank and how much it has paid the other bank, finds the difference and either bills the other bank that much in gold or pays it in gold. In a fractional reserve system, the actual use of gold for this is tiny, hence the low price of gold relative to the dollar. In a fully-backed world, the gold required would be much higher. This also does not affect the average man.
Wealth preservation, however, does, and here is where fiat money is truly pernicious. For starters, fiat money always declines in value over the long term because monied interests prefer it that way and the lumpen is in debt up to its eyebrows anyway, something inflation helps with, as each reduction in the value of the money causes a reduction in the amount they actually owe.
However, keeping money in those same dollars is not a good idea for precisely that reason, so people are driven to acquire assets and leverage themselves (borrow money) to buy more on the theory that money is cheap and easy to repay later. This means there is little money left for emergencies. There is also little money for opportunities. All of which means that insurance gets a larger share of the economy.
Another problem is that banks tend to make money no matter what the value of money in a fiat system because they can borrow at one rate and lend at another. This allows them to pocket the difference, which is making money. So, if they borrow money at 3% and lend it at 5%, even though money may lose half its value during the period of the loan, they still make the 2% in money that is now worth half what it was. However, they made that money not by working, producing value, or investing money; they made it by borrowing money that sourced from the fed, so was not backed by value, and loaning that, something nobody but bankers can do.
What this tends to do is make it hard for anyone but bankers to make money in investing. Bankers can borrow money at an artificially low rate, allowing them to invest for artificially low returns, often lower than real inflation, because they make money on the difference. The rest of us have to invest our real money, which means we lose money over the long haul, rather than make it. This is true of the stock and bond markets.
It is not, however, true of commodities, and this is where we see their scheme coming apart. The only bet the average investor can take short of being a sole proprietor or major partner in a business that does not allow outside investment, is in gold or silver, which are not investments in the normal sense in that they do not make money.
However, as fiat money decreases in price, its utility as a store of value will also decrease, driving more and more people to transfer fiat store into gold, silver, palladium and platinum, the traditional 'money metals'. This drives the value of the money metals up as it drives the value of the dollar down. However, the value of the dollar tends to decrease more slowly than the value of the money metals increases, causing those holding money metals to see the value they hold increase in purchasing power, meaning that during an inflationary crisis, money metals do qualify as an investment.
Now, were gold to become the currency, the increase in value of an ounce of gold purchased cheaply now would be truly staggering...
Thursday, January 10, 2008
Inflation A' Comin'
Right now, we are witnessing asset deflation coupled with price inflation. In other words, the things we own are worth ever less while the things we must buy keep getting more expensive. If left alone, it would reach a new equilibrium eventually. However, it will not be left alone.
First, banks are heavily leveraged right now. This means they have borrowed money to make money. As asset prices depreciate, their portfolios depreciate as well. Values become 'marked to market', meaning sold and a price established, rather then held with an estimated value. When this happens, the average sale price becomes the value of the asset.
Now, with the subprime collapse and the collateral reduction in high-end properties due to uncertainty and unemployment, banks are seeing massive chunks of their portfolios drop in price, which puts them in a net loss position. Further, they are required to maintain minimal reserves against just this sort of situation, and those reserve requirements are a percentage of their total outstanding debt, modified by assets. As the asset value decreases, the asset to debt ratio grows and the reserve requirements increase, meaning banks cannot loan any more money, and, indeed, must borrow to cover what they've loaned already.
When the banks won't lend to each other and there's no other source of income, such as foreign investors, money becomes hard to get. This drives down the cost of capital investments and assets, as purchasers dry up due to lack of funds. Of course, this becomes an overall drag on the economy as companies begin to run out of orders for capital goods as their assets depreciate as well.
In order to prevent a death spiral, the federal reserve in concert with the treasury and a compliant congress will inflate the economy by any means necessary. Expect federal mortgage aid. Expect bailouts, both public and private. Expect a tax rebate coupled with more credits aimed at low-income households. Expect bold new government programs. Expect none of this to really work.
However, the other side, where things are getting more expensive to buy, things we need every day and are not optional, expect that trend to continue unabated. The very measures the administration will use to fight deflation will by their very nature drive inflation. Since the asset depreciation is a form of deflation, it will be fought with more money in the system in order to enable higher prices.
This will happen not because it is necessarily beneficial, but because the ones who control whether it will happen are the ones who will feel the most pain if it happens. In other words, the ones in charge of the money supply are bankers, and they are the ones who are being hurt the worst.
Don't get me wrong; inflation will make my life much easier. I have a fixed apr mortgage. If the dollar falls, my house gets relatively cheaper. Many people are in this same position, many of them with houses they can no longer afford. This will be the populist justification, as wages go up due to inflation. For a time, this will be considered a good thing.
The problem is, of course, that any inflation may end in runaway inflation, which results in the destruction of the economy, and, often, violence. The collapse of the Weimar Republic and the subsequent rise of Hitler was partly a result of the Weimar hyperinflation. The reign of terror in France was due partly to a destroyed economy due to mismanagement and inflation. Mismanagement and inflation brought down the Roman empire.
This is, in the opinion of the Bureau, the strongest argument for free money. Not hard money, free money. Money needs to be created outside the government and not be in the control of the government. The government should pick either gold, silver or platinum and use it for all their accounts. This means all receipts and all payments are to be in the metal of the land. Actually, I prefer a specific alloy of the three to reduce the effects of volatility. The government should not coin money; the money should be value in weight and the government taxes and so on should be in weight of metal, not some abstract amount.
First, banks are heavily leveraged right now. This means they have borrowed money to make money. As asset prices depreciate, their portfolios depreciate as well. Values become 'marked to market', meaning sold and a price established, rather then held with an estimated value. When this happens, the average sale price becomes the value of the asset.
Now, with the subprime collapse and the collateral reduction in high-end properties due to uncertainty and unemployment, banks are seeing massive chunks of their portfolios drop in price, which puts them in a net loss position. Further, they are required to maintain minimal reserves against just this sort of situation, and those reserve requirements are a percentage of their total outstanding debt, modified by assets. As the asset value decreases, the asset to debt ratio grows and the reserve requirements increase, meaning banks cannot loan any more money, and, indeed, must borrow to cover what they've loaned already.
When the banks won't lend to each other and there's no other source of income, such as foreign investors, money becomes hard to get. This drives down the cost of capital investments and assets, as purchasers dry up due to lack of funds. Of course, this becomes an overall drag on the economy as companies begin to run out of orders for capital goods as their assets depreciate as well.
In order to prevent a death spiral, the federal reserve in concert with the treasury and a compliant congress will inflate the economy by any means necessary. Expect federal mortgage aid. Expect bailouts, both public and private. Expect a tax rebate coupled with more credits aimed at low-income households. Expect bold new government programs. Expect none of this to really work.
However, the other side, where things are getting more expensive to buy, things we need every day and are not optional, expect that trend to continue unabated. The very measures the administration will use to fight deflation will by their very nature drive inflation. Since the asset depreciation is a form of deflation, it will be fought with more money in the system in order to enable higher prices.
This will happen not because it is necessarily beneficial, but because the ones who control whether it will happen are the ones who will feel the most pain if it happens. In other words, the ones in charge of the money supply are bankers, and they are the ones who are being hurt the worst.
Don't get me wrong; inflation will make my life much easier. I have a fixed apr mortgage. If the dollar falls, my house gets relatively cheaper. Many people are in this same position, many of them with houses they can no longer afford. This will be the populist justification, as wages go up due to inflation. For a time, this will be considered a good thing.
The problem is, of course, that any inflation may end in runaway inflation, which results in the destruction of the economy, and, often, violence. The collapse of the Weimar Republic and the subsequent rise of Hitler was partly a result of the Weimar hyperinflation. The reign of terror in France was due partly to a destroyed economy due to mismanagement and inflation. Mismanagement and inflation brought down the Roman empire.
This is, in the opinion of the Bureau, the strongest argument for free money. Not hard money, free money. Money needs to be created outside the government and not be in the control of the government. The government should pick either gold, silver or platinum and use it for all their accounts. This means all receipts and all payments are to be in the metal of the land. Actually, I prefer a specific alloy of the three to reduce the effects of volatility. The government should not coin money; the money should be value in weight and the government taxes and so on should be in weight of metal, not some abstract amount.
Wednesday, January 9, 2008
Wells Fargo Sux
They have one job as far as I am concerned: turn my paycheck into cash. However, despite that it is a company check drawn on a corporate account, they insist on calling a company officer before cashing, something my company has told them not to do because it inconveniences everybody. This is part of the bank's ongoing anti-fraud stuff wherein they do their level best to not honor any of their agreements. It's not bad enough that they charge $5 for the privilege of getting my money, they also now take an hour to cash a check. When I informed them this was basically 'normal bank bullshit', we agreed I need not darken their door because the 'will not service me', which was odd, because as far as I could tell, they had not serviced me until my boss called and read them the riot act, reminding them that it was a corporate account with a large balance that could be moved elsewhere.
I hate banks in general. They get a significant amount of income from fees these days, hence a fee for every little thing. The rest of their income comes from making sure they never have to give out cash. Chase has reduced the amount you can take out of an ATM, for instance. I have a prepaid debit card now. Not only can I take out as much as I like when I like, although ATMs are limited to a generous $500, I pay no fees above the fee for having the card and loading the card, which are both cheaper than my Wells Fargo bank account had been, but my card works everywhere with no fraud restrictions. I cannot count the times Wells Fargo shut off my card for some fraud suspect or another, such as trying to buy fuel out of state...
Feh. If banking regulation means anything, which it doesn't, banks ought to be required to pay the full amount, in cash, on any presented check drawn on their bank. Instead, they increasingly demand that you have an account for everything, which kind of defeats the purpose of having an account, because if I cannot write a check that is immediately cashable for an amount in my account, then why have an account? Why not simply carry the cash? Morons.
But to me, it is interesting that the 'mighty' Wells Fargo is #2 in the subprime lending market and is now getting awfully tight with the cash...
I hate banks in general. They get a significant amount of income from fees these days, hence a fee for every little thing. The rest of their income comes from making sure they never have to give out cash. Chase has reduced the amount you can take out of an ATM, for instance. I have a prepaid debit card now. Not only can I take out as much as I like when I like, although ATMs are limited to a generous $500, I pay no fees above the fee for having the card and loading the card, which are both cheaper than my Wells Fargo bank account had been, but my card works everywhere with no fraud restrictions. I cannot count the times Wells Fargo shut off my card for some fraud suspect or another, such as trying to buy fuel out of state...
Feh. If banking regulation means anything, which it doesn't, banks ought to be required to pay the full amount, in cash, on any presented check drawn on their bank. Instead, they increasingly demand that you have an account for everything, which kind of defeats the purpose of having an account, because if I cannot write a check that is immediately cashable for an amount in my account, then why have an account? Why not simply carry the cash? Morons.
But to me, it is interesting that the 'mighty' Wells Fargo is #2 in the subprime lending market and is now getting awfully tight with the cash...
Tuesday, January 8, 2008
What Is Really Going On
Every so often, the Skip Bureau publishes its best guess as to the actual happenings in the world, not that reported by media, your brother-in-law, or other reliable sources.
So, Bhutto was assassinated in Pakistan. Curiously, legitimate opponents of Musharraf have been dropping like flies, to legal problems, or, er, like flies. However, Musharraf's hold on Pakistan remains tenuous. It has been apparent to the Bureau since the beginning of the misadventure in Afghanistan and the global war on ragheads that Musharraf would not long endure. He has always been nothing more than the puppet of the Bush administration, and is unpopular amongst some very hard men. It appears on first blush and with nothing even remotely approaching evidence that some intelligence agency or agencies have seen fit to help him remain in power.
Now, given the previous paragraph, one would normally point at the CIA or Pakistani Intelligence, but there are a lot of potential candidates. India, for instance, is situated to make inroads into Pakistan, having much more money available and an improving governing process. China has an interest and China's intelligence capability in wet work is pretty much unknown at this point, but they have steadily been improving their assessment capability, and one should not be surprised at effective field work from them. Of course, the CIA is a suspect, as they treat Pakistan like a back yard, having operated there for decades now, due to Afghanistan having been a front line in the cold war.
On the economic front, the dollar continues to fall, but all other currencies fall as well. China is forcing its currency down as a 'race to the bottom' with the dollar. The Euro is falling more slowly than the dollar. Ditto the Pound, Loony, so on. However, the global resource boom continues, driven, mostly, by falling currencies. The risk is that the falling currencies will misprice commodities and cause an eventual over-production in commodities, pretty much as inflation has caused an over-production in everything else so far. However, for those of you out there trying to avoid losing your shirts, the key thing to remember is that all paper money is inflating and thus losing value. None of them are safe.
On the US political front, it is appearing more and more that Obama may win the presidency. Ron Paul has made major inroads and still remains viable for the nomination, and the Bureau makes not secret about supporting him. However, many of the voters that Ron Paul needs are also possible Obama supporters, and Iowa has shown Obama can win them.
On the plus side, it appears Giuliani may be done for. This is a positive outcome of the Paul campaign, in that Paul and Giuliani compete for substantially the same Republican vote, that of the socially liberal fiscal conservative Republican. These have almost entirely gone to Ron Paul due to his superior record in civil liberties. Giuliani has to count on 'blue state Republicans', which are getting pretty thin on the ground anyway.
As for Iraq, it has become clear that genocide has reduced violence. After all, there's nobody left to kill in much of the country...
There are some improvements attributable to better management, but they all end up being in the vein of working with the locals, which often means surrendering key goals the administration had prior to the repurposing of the war. What this means is that many of the left's ideals, such as feminism, are going to be ignored in the final settlement in Iraq, pretty much as the Iraqis want it.
Iran continues to puzzle the stunted analysts in DC. What every person who analyzes anything in the Middle East must understand is very few arab countries have anything remotely approaching a unified government. In most cases, there is a secular government, which in Iran is Ahmanijad or however you spell it, and then there is a much more powerful group, which in Iran comprises the Ayatollahs or however you spell it. Many countries are essentially in multi-way civil wars.
So, Ahmanijad is the president of Iran, which is a bully pulpit, but does not reflect the feelings of the people or even the position of the religious leaders. The truth is that Iran as a country holds no real ill will against the United States. However, they are, understandably, nervous, given what has happened in Iraq.
No matter how much one may argue the US had ever reason to attack Iraq, nobody outside of the US concurs. Basically, the US has been seen as an aggressor, attacking a country for little more than failure to abide by a technicality in an agreement with the UN. It was pretty apparent to anyone interested in intelligence that Iraq never posed any real threat to the US, being one of the better run countries in the middle east.
In the same vein, Iran poses no serious threat to the US or its interests. However, it is refusing to 'play nice', which offends sensibilities in the neocon camp. Iran does, however, pose a threat to the US if mishandled. Iran has a virtual lock on the Strait of Hormuz, making potential losses high without an overland trek to get to Iran. The US military is, of course, not in any shape to fight Iran anyway.
The US military is in bad shape. Aircraft are running high hours. Ships are old. Morale is low due to extended deployments. As long as we continue to pretend our soldiers are not permanently deployed professional soldiers, we will have morale problems. As long as we put off spending to fund necessary repairs, we will have equipment failure, which, by the way, will exacerbate morale problems.
Fortunately, a corner seems to have been turned, with the National Intelligence Estimate showing some signs of a revolt against the once solid Bush regime. The drubbing the Republicans are receiving by the Democrats in terms of primary turnout shows that this neocon adventure may be nearly over. The Bureau does not, however, expect any improvement with a Democratic administration, harkening back to the days of Clinton and his progression of stupid interventions, one of which, Somalia, is a textbook example of how to ruin a country.
So, Bhutto was assassinated in Pakistan. Curiously, legitimate opponents of Musharraf have been dropping like flies, to legal problems, or, er, like flies. However, Musharraf's hold on Pakistan remains tenuous. It has been apparent to the Bureau since the beginning of the misadventure in Afghanistan and the global war on ragheads that Musharraf would not long endure. He has always been nothing more than the puppet of the Bush administration, and is unpopular amongst some very hard men. It appears on first blush and with nothing even remotely approaching evidence that some intelligence agency or agencies have seen fit to help him remain in power.
Now, given the previous paragraph, one would normally point at the CIA or Pakistani Intelligence, but there are a lot of potential candidates. India, for instance, is situated to make inroads into Pakistan, having much more money available and an improving governing process. China has an interest and China's intelligence capability in wet work is pretty much unknown at this point, but they have steadily been improving their assessment capability, and one should not be surprised at effective field work from them. Of course, the CIA is a suspect, as they treat Pakistan like a back yard, having operated there for decades now, due to Afghanistan having been a front line in the cold war.
On the economic front, the dollar continues to fall, but all other currencies fall as well. China is forcing its currency down as a 'race to the bottom' with the dollar. The Euro is falling more slowly than the dollar. Ditto the Pound, Loony, so on. However, the global resource boom continues, driven, mostly, by falling currencies. The risk is that the falling currencies will misprice commodities and cause an eventual over-production in commodities, pretty much as inflation has caused an over-production in everything else so far. However, for those of you out there trying to avoid losing your shirts, the key thing to remember is that all paper money is inflating and thus losing value. None of them are safe.
On the US political front, it is appearing more and more that Obama may win the presidency. Ron Paul has made major inroads and still remains viable for the nomination, and the Bureau makes not secret about supporting him. However, many of the voters that Ron Paul needs are also possible Obama supporters, and Iowa has shown Obama can win them.
On the plus side, it appears Giuliani may be done for. This is a positive outcome of the Paul campaign, in that Paul and Giuliani compete for substantially the same Republican vote, that of the socially liberal fiscal conservative Republican. These have almost entirely gone to Ron Paul due to his superior record in civil liberties. Giuliani has to count on 'blue state Republicans', which are getting pretty thin on the ground anyway.
As for Iraq, it has become clear that genocide has reduced violence. After all, there's nobody left to kill in much of the country...
There are some improvements attributable to better management, but they all end up being in the vein of working with the locals, which often means surrendering key goals the administration had prior to the repurposing of the war. What this means is that many of the left's ideals, such as feminism, are going to be ignored in the final settlement in Iraq, pretty much as the Iraqis want it.
Iran continues to puzzle the stunted analysts in DC. What every person who analyzes anything in the Middle East must understand is very few arab countries have anything remotely approaching a unified government. In most cases, there is a secular government, which in Iran is Ahmanijad or however you spell it, and then there is a much more powerful group, which in Iran comprises the Ayatollahs or however you spell it. Many countries are essentially in multi-way civil wars.
So, Ahmanijad is the president of Iran, which is a bully pulpit, but does not reflect the feelings of the people or even the position of the religious leaders. The truth is that Iran as a country holds no real ill will against the United States. However, they are, understandably, nervous, given what has happened in Iraq.
No matter how much one may argue the US had ever reason to attack Iraq, nobody outside of the US concurs. Basically, the US has been seen as an aggressor, attacking a country for little more than failure to abide by a technicality in an agreement with the UN. It was pretty apparent to anyone interested in intelligence that Iraq never posed any real threat to the US, being one of the better run countries in the middle east.
In the same vein, Iran poses no serious threat to the US or its interests. However, it is refusing to 'play nice', which offends sensibilities in the neocon camp. Iran does, however, pose a threat to the US if mishandled. Iran has a virtual lock on the Strait of Hormuz, making potential losses high without an overland trek to get to Iran. The US military is, of course, not in any shape to fight Iran anyway.
The US military is in bad shape. Aircraft are running high hours. Ships are old. Morale is low due to extended deployments. As long as we continue to pretend our soldiers are not permanently deployed professional soldiers, we will have morale problems. As long as we put off spending to fund necessary repairs, we will have equipment failure, which, by the way, will exacerbate morale problems.
Fortunately, a corner seems to have been turned, with the National Intelligence Estimate showing some signs of a revolt against the once solid Bush regime. The drubbing the Republicans are receiving by the Democrats in terms of primary turnout shows that this neocon adventure may be nearly over. The Bureau does not, however, expect any improvement with a Democratic administration, harkening back to the days of Clinton and his progression of stupid interventions, one of which, Somalia, is a textbook example of how to ruin a country.
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