War in Iraq, 21st Century Economics...Unpleasant Thoughts

I try to follow the coverage the media, both "mainstream" and "acceptable-alternative," gives various news stories.

Without question the Democrat Primary campaign gets the most ink day after day. And the coverage, as John Edwards' wife so ably pointed out in her NYTimes Op-Ed piece, almost solely concentrates on various tactics, gossip and the candidates' personalities.

So be it.

But here at this modest Blog, the temptation to do otherwise notwithstanding, I am resolved to write about important matters.

The two most important issues facing the United States (and by extension, the democratic, industrialized democracies) are the War in Iraq and the Economics of the 21st Century, particularly the unprecedented transfer of wealth from the aforementioned nations to the nations that produce exportable oil.

These are both complex issues not easily captured in sound bites or snapshots. To report on them, let alone analyze and comment (synthesize) on them, requires deep, sometimes long, thinking. That's not what media is all about. Mass media is about quick and easy; here today, gone tomorrow kind of stuff.

I'm not a media-guy, but neither am I an academic. I use my brain for sure; but I'm not afraid to use my human intuition either. I'm not an "expert" in/on anything. My only credential is the writing I produce.

As I indicated in a recent earlier blog, I am working on the general subject of the inexplicable spike in commodity prices, including without limitation such commodities as oil, corn, wheat, rice, and soybeans.

Concomitant with that work, I am thinking about the insidious transfer of wealth currently taking place, whereby nations such as the USA and Japan, for example, are having their wealth stolen by countries such as Saudi Arabia, Iran and Russia, for example. I have reached one conclusion thus-far:

THIS PHENOMENON IS THE GREATEST NATIONAL SECURITY THREAT CURRENTLY FACING THE INDUSTRIALIZED DEMOCRACIES; AND THE ELECTED LEADERSHIPS OF THESE DEMOCRACIES ARE SITTING WITH THEIR FINGERS UP THEIR COLLECTIVE ASSES WHILE THIS IS HAPPENING.

The War in (not with) Iraq is the other subject I am expending thought upon. The fabulousness of the USG miscalculations is unprecedented in our nation's history. And the relative acquiescence of the American public to this patent and self-destructing fiasco is nothing if not mysterious.

As part of this study, the grotesque suffering of the Iraqi people themselves due to our government's preposterous assumptions that under-girded our invasion is at the forefront of my thinking. For example, Iraq's population is approximately 8.3 per cent of that of the United States (25 million vs. 300 million;) therefore, to adjust Iraq casualty numbers to make them proportional to what those numbers would be in our country if the "war" were being fought on United States home-turf, one must multiply the Iraq citizen casualty numbers by a factor of 12! That means when 60 Iraqis die in a suicide bombing , it would be the equivalent of 720 Americans dying in a suicide bombing on United States soil.

So every time you read about X-number of Iraqis dying, multiply that number by 12 to appreciate the impact that those many deaths would have on us.

More and more to come on these, and other topics.

Bear, Stearns Turns to Oil as Its Savior

Rumours swirl that the only entities capable of saving Bear, Stearns (BS) from being ingloriously dumped into the dustbin of Wall Street history are the Sovereign Investment Funds (SIF).

SIF--and their cousins, super-wealthy sheiks, sultans, emirs--have already participated in the mouth-to-mouth resuscitation required by Citigroup, Morgan, Stanley, UBS, Merrill Lynch and who knows how many other mega investment banks in the US and abroad.

The rescues have taken the form of these SIF injecting large amounts (billions of dollars) into the trouble institutions by purchasing equity stakes--ownership stakes--in them.

The parabolic rise in the price of oil has produced an unprecedented and largely insidious transfer of wealth from the consuming to the producing nations of that oh so necessary commodity. The USA is the number one consumer nation; on the other side of the equation stand Saudi Arabia and Putin's Russia as the number one and two producing nations, respectively.

These nations and others such as China, accumulate vast hoards of dollars. In the very recent past the investment of these dollar caches was channeled largely to USGovernment securities. In other words, they lent the money back to us; we agreed to pay them interest on their investment, and guaranteed that their principal would be returned to them at the predetermined end of the loan. The investor nations had bought themselves nothing more than a stake in the continued prosperity of the USA. They owned nothing more than a "promise." And the continued growth of the US economy was as much in their interest as ours.

But now SIF investments are being diversified into vehicles other than USGovernment bonds; and no longer are confined to merely lending money. Now SIF are purchasing assets. In and of itself, these acquisitions of US assets present no particular problem. If a Saudi "prince" wants to buy Rockefeller Center, who cares? If the UAE SIF scoffs up the MGM Grand in Vegas, let 'em.

Would it make a difference, however, if we woke up one morning to discover that Rockwell International was now under the control of KGB-Russia? Or Boeing was owned outright by the House of Saud? The financial industry is as important to US national security as is the arms manufacturing industry.

And what these bailouts of Wall Street's grandest names means is that slowly but surely the ownership of our private financial apparatus is slipping out of the hands of Americans and into the sweaty palms of nation's whose vital interests are not necessarily congruent with those of the USA.