Paying the Piper

The U.S. dollar is hovering near a new low today … $1.47 per Euro … and I’m afraid it is destined to go lower. Why? Very simply, because our balance of trade is so abysmal (running about a negative $55 billion per month!), partly traceable to the outrageously high price of oil (closing in on $100 per barrel), and this traceable primarily to an international oil cartel that has (through collusion and the politics of fear) decoupled the price of oil from what a free market would dictate (many believe that the free-market price of oil would be below $50 a barrel.) (If the UN were to ever aspire to become a world government, it would do away with international cartels of any stripe.)

What are the U.S.’s options to deal with this conundrum? Unfortunately there are only a few … and most of them are onerous:

1) Continue to lower U.S. interest rates and, as a consequence, weaken the U.S. dollar further. This, in turn, would devalue the dollar reserves held by foreign governments (often now being called “sovereign funds”) and probably cause a stock market swoon. But, this would make our exports cheaper and much more attractive to world markets and therefore should help to improve our balance of trade.
2) Install high import duties on oil and many Chinese (read Wal-Mart) items. Unfortunately this would likely cause a trade war (which many claim caused the economic depression in the 1930’s).
3) Establish a clear national priority to become energy independent within five years. This would mean increasing mileage standards for new cars and trucks, building many new nuclear power plants, reducing clean-air standards for coal-fired power plants, placing greater emphasis on bio-fuels, drilling for oil in ANWAR and in the gulf of Mexico (e.g., off-shore in Florida), and harvesting/processing the oil shale deposits in Utah. (Other talked-up alternatives such as wind power, solar power, etc. would have minimal effect.)
4) Devalue the U.S. dollar. Basically, say that our dimes are now called “dollars” with many of the same results as noted in #1.
5) Disavow our foreign debts. This could be done by declaring that only U.S. citizens or companies could redeem government debt obligations. This would force foreign governments to sell their U.S. government debt obligations to U.S. citizens/companies at pennies on the dollar.
6) Invade and take over the oil supplies of one or more Middle Eastern countries (or even Venezuela). I would suggest maybe Saudi Arabia and Kuwait. We could also directly usurp most of the Iraqi oil production to our benefit (over ¾ billion barrels per year).
7) Permit or even encourage foreign ownership of U.S. companies (e.g., Citigroup, NASDAQ, etc.) and then, at some point in the future, nationalize these companies. (Russia, Cuba, Venezuela, China, Mexico, Saudi Arabia, etc. have all done this very thing to us in the past.)

Let’s pretend you’ve just been elected President. Which one (or ones) would you choose?

Unintended Consequences

Larry Summers (the former Clinton Treasury Secretary and bounced President of Harvard) recently predicted that the odds were high that the U.S. is heading into a recession. This prediction is based on his assessment of the consequence arising from the recent sub-prime mortgage meltdown. In turn, this mortgage debacle, predicted by some to cost U.S. financial institutions as much as $300 billion, has occurred because of both greed on the part of lenders and financial naiveté on the part of borrowers. The specter of this huge financial loss has caused a tightening of monetary flows that is rippling through many other economic sectors and is the reason for Mr. Summers' gloom and doom.

Now, why has this sub-prime mortgage crisis occurred? May I suggest that politician's fingerprints are all over this misfeasance? I distinctly remember a number of years back when bank's lending practices were under the microscope and, if the number of mortgages given in depressed urban areas were not proportional to those in more affluent areas, they were castigated by solons at both the national and state level. The media had a hay day with such lurid headlines. In response, banks and other financial institutions, against their better instincts, started giving mortgages to marginal credit risks … and, in return, jiggered the terms of these mortgages to compensate them for these higher risks. They then would package these mortgages and sell them to third parties at a nice profit. The result was a paving over of the inherent risks that these mortgage packages represented.

Strutting in the background with thumbs in their suspenders were the politicians who cajoled this "best-practices" change on the part of mortgage lenders. And they obviously used this relaxation to garner many votes among those who were then getting these sub-prime loans. Now that this debacle is affecting us all, where are those politicians? May I suggest that you look under their desks? Will those home owners whose houses have been foreclosed on take it out on these same politicians? I doubt it. Most likely they will despise the banks and other mortgage lenders. And now these pols are also deflecting their own guilt by telling lenders to rejigger their rates so that home-owners are not thrown out on their ears (lowering the rate but extending the term of the mortgage). Basically, like politicians since time immemorial, they are kicking the can down the road. They are also ginning up a legal mechanism to make class-action suits easier for such mortgage borrowers. So, those financial institutions, which are not deep-sixed by this mortgage crisis, will, in the longer run, be crippled by our avaricious trial lawyers.

Soon to be Forgotten

The passing of Norman Mailer has brought to mind what a horse’s ass he really was … and how his only real claim to fame was that he used the word “fug” (instead of that other word) in the Naked and the Dead and, consequently became an antebellum infant terrible. After that, he stayed famous, in my opinion, not because of his tortured prose but because of his continued acting-up (stabbing and almost killing his wife; getting a murderer released from jail so that he could murder again; etc) and his ultra-liberal politics. This then led me into compiling the following list of prima donnas whose reputations far exceed their talents … and whose self-images exceed(ed) their reputations. I fully expect that they will slowly fade from history like Lewis Carroll's Cheshire cat. My current list of imposters is:

Norman Mailer, Andy Warhol, Maya Angelou, George Lucas, Paris Hilton, Al Gore, Tom Cruise, Rush Limbaugh, Joe Biden, Miss Piggy, Bob Dylan (aka Zimmerman), Harold Pinter, Frank Lloyd Wright, Céline Dion, and Donald Trump.

I would love to be also able to put Barbara Streisand on this list, but, unfortunately, she really does (did) have quite a bit of musical talent.

SHAME ON US

NEWS:
Dozens of schoolchildren and five teachers were among those killed in a suicide attack in northern Afghanistan earlier this week — the country’s deadliest since the fall of the Taliban — the government said Friday.
The 59 schoolchildren had lined up to greet a group of lawmakers visiting a sugar factory in the northern province of Baghlan on Tuesday when a suicide bomber detonated explosives.
“The education minister has ordered that no children should be ever again be used in these sort of events,” said Zahoor Afghan, an Education Ministry spokesman. He said the children ranged in age from 8 to 18.
In all, the explosion claimed the lives at least 75 people, including several parliamentarians, and wounded 96. It was the deadliest attack in the country since the toppling of Taliban regime from power in the 2001 U.S.-led invasion.

All in the name of radical Islam. And we want to roll over for these barbarians. Shame on us.

GLOBAL SMARMING

By JOE McDONALD (Associated Press Writer)
From Associated PressNovember 09, 2007 4:21 AM EST

BEIJING - A Chinese official gave the clearest sign yet that Beijing will reject binding caps on greenhouse gas emissions at a global meeting next month, saying Friday developing countries must be allowed to raise emissions to fight poverty.
"Climate change is caused mainly by developed countries," Vice Foreign Minister Zhang Yesui said. "They should have the main responsibility for climate change and to reduce emissions."
Beijing is about to overtake the United States as the world's top greenhouse-gas producer. It is under pressure from Washington to accept binding limits at a meeting in Indonesia of environment ministers from 80 nations to discuss a possible replacement to the 1997 Kyoto Protocol on emission reductions.


HOW DO YOU SPELL PATSY? -- "A-L G-O-R-E"