Sunday, June 07, 2009

The Week That Was 6-07-09

I have decided to highlight the significant news of the week. This week boils down to Money and to the Mideast.

Obama made a speech in Cairo Egypt . He is an incumbent President and can no longer run against Bush. Obama decided to expand the war in Afghanistan. Obama spilled his war over into Pakistan creating 2.4 million Muslim refugees without adequate provisions for their care. He also appointed Stanley McChrystal to lead NATO forces in Afghanistan. McChrystal was the head of the Joint Special Operations Command which is to say he was in charge of Dick Cheney’s assassination bureau. K T McFarland, a FOX news contributor and former Republican DOD official has just returned from Afghanistan. She sees no goals, no exit strategy and lots of downside to this expanded war.

In my opinion Afghanistan and Pakistan could spin out of control long before Israel attacks Iran. I remind you that I predicted no war against Iran in 2009. Let me emphasize that Afpak is now Obama’s war to lose. And he cannot win it. So why is he there?

Iran announced they will begin production this week of 40 km range ant-aircraft missiles. As I reported previously, the Chinese had been talking to Iran about selling them Hong Qi 9 anti-aircraft missiles which have a range of 75 km. The Iranians have a history of building Russian and Chinese military equipment under license. Most notably those 100 and 150 km range rocket artillery pieces that could together with the SS-N22 Sunburn and SS-N26X Yakhonts (Onyx) anti-ship missiles sink our entire Persian Gulf fleet in minutes. The Iranians are only saying that these new 40 km range anti-aircraft missiles are fast (supersonic) and accurate.

As I said before, an Israeli assault on Iran’s nuclear works would be suicide for the Jewish pilots. They have to come within a 9 km range of their targets at specific angles to release their American GBU-28s which means that the Iranians can flood the sky with anti-aircraft missiles prior to the Israeli jets reaching the 9 km envelope at which point they can fill the sky with rapid anti-aircraft fire and then release even more missiles as the American supplied jets attempt to return home. Did I mention that these 90 plus jets would have to refuel both before and after hitting their targets? Israel would be lucky if half of their pilots and planes returned home. For what? Iran is years away from developing a nuclear bomb. North Korea will be selling nukes before that.

In passing I should note that the Saudi Foreign Minister has threatened to use oil as a weapon to force Israel out of Gaza. I don’t think we will hear more of this until Israel attacks Lebanon again. Maybe in a few months.

A couple weeks ago I mentioned the Laugh Heard Round The World in reference to that fast approaching day when the President of the United States goes to China and asks for a couple trillion dollars to fund our deficit and to please throw in a few hundred billion to bid oil away from Chinese workers so unemployed Americans will vote for Obama’s party in the 2010 elections.

Last week the Chinese laughed when Treasury Secretary Tim Geithner tried to explain to them that their nearly two trillion investment is American bonds was safe. I am now seeing articles around the world saying what I have been saying about the funding of the deficit. World trade has collapsed so no group of countries in Asia or Europe has enough of a trade surplus to fund our enormous deficits. That means we will have to monetize the debt which is to say that the Federal Reserve will have to create another trillion dollars every few months to fund the deficit and to buy worthless government backed mortgages from Fannie Mae as they did earlier this year,

Keep in mind that the trillions of dollars the FED is creating is expanding M0, the monetary base which can through fractional reserve banking grow into ten to twenty additional M3 dollars. We are headed to a REALLY BIG INFLATION in the very near future.

The Fed did manage a few months ago to bring down interest rates on Treasury bonds and home mortgages when they created a trillion dollars and bought Fannie Mae mortgages and Treasury bonds. If you remember I told you that we need to keep an eye on Treasury bond auctions so we could tell when the dollar was in imminent danger of collapse. Interest rates have creeped back up 7/10ths of a point on Treasuries and half a point on mortgages.

If, as expected, those two rates go up another point, the economy will nose dive big time.

State and local governments are facing savage cuts in their budgets which combined with tax increases will produce a counter effect to Obama’s federal stimulus.

I would love to force someone from the administration to sit down with an intelligent person and explain how it is possible that they can even think that there is one chance in a thousand that their economic policies will work. And then have them come back and repeat the show the next night with our Mideast military policy as the subject.

Quote of the week: Have you hear of the new car to be released by GM (Government Motors)? It’s called the Obama. It goes from zero to Bush in 8.4 seconds. Quoted from Mike Rivero.


This is a very funny video. If Steve Jobs were George Bush or Barack Obama:

To watch K T McFarland’s video DEFCON 3 made after her return from Afghanistan please go here:

To read about those new Iranian anti-aircraft missiles please go here:

To read about what the Saudi Foreign Minister had to say about using oil as a weapon to get the Israelis out of Gaza please go here:

To read why debt monetization is the only path the Federal Reserve can follow please go here:


Post a Comment

<< Home