Wednesday, June 23, 2010

General McChrystal Relieved of Groundhog's Day Purgatory

President Obama fired General McChrystal today after the Rolling Stone article brought to light McChrystal and his braintrust's lack of respect for Obama and his civilian braintrust. Not much of a surprise that the employees collecetively and openly share a disdain for their employer.

We've all been there and have held our employer in a negative light from time to time, making jabs and sharing funny nicknames with our co-workers at our bosses expense.

General McChyrstal and his men are no different from you and I in that respect. They're frontline career soldiers, carrying out orders from frontline career politicians, who most likely, never experienced combat beyond a verbally combative Jim Lehrer moderated political debate.

To keep their sanity, especially being away from their families for several years at a time, they have to keep each other laughing. I admit, it's hard not to laugh at the politicians calling the shots since they haven't exactly been forthcoming about this war/invasion/occupation from the beginning. (Recall, this was about 9/11, the hunt for Osama bin Laden, WMD's, Democracy (for who?), Saddam the terrorist, Al Queda, removing the Taliban, control of the worlds second largest oil reserves, and now $1 trillion natural resource deposits).

Most American's understand this is not a war, but an invasion and occupation to take control of oil and natural resources. American politicians have committed the young men of our military to conquer this strategic region of the world, ensuring another American century of economic prosperity.

It appears that the American military serves American commercial interests throughout the world, rather than providing safety and peacekeeping. It's Corporate Imperialism 101.

There's a strong demand for free-flowing shipping routes and oil pipelines to freely transport inexpensive energy and resources that keep the world's economy running at maximum capacity (for the countries that get to participate in global monetary system). And as we know, our monetary system is built upon continual growth (population, money supply, industrial output, etc) and needs cheap natural resources to keep the growth machine firing on all cylinders.

The General and his men are doing what they were sent in to do - liberate the natural resources. It's probably a thankless and stressful job that needs daily laughter to keep a healthy balance on their psyche. If they can't have Hillary Clinton fly in with Sinbad for comic relief (remember their previous Bosnian landing amidst heavy sniper fire?, they need to create their own comedy sketch. If Obama and his men have become the butt of jokes for the top military brass, so be it. The politicians are half a world away, making international military decisions for domestic political and economic outcomes. Guys on the battlefield probably see what needs to happen to "win" the war, but may realize their trapped in an endless groundhog day that feels like it's never going to end.

Friday, June 11, 2010

2012 Presidential Election - Bull Moose or Tea Party?

I started writing some stuff this morning, after it hit me that the 2012 presidential election may be a Tea Party candidate or independent like Ron Paul. There's a logical progression leading up to the election:

First was subprime in 2007, then US financial fallout in 2008. Last year was a carry trade of profits and asset appreciated, perpetuated by banks borrowing at 0.25% from the Fed (taking on more debt), investing in Treasuries at 3.25% and everything else they could get their hands on, flooding the market chasing yield, driving up prices. Nobody wants to be the last man standing, so the carry trade is unwinding, as we've seen the stock market in a sell-off by dropping 1500 points since January, after gaining 2743 points in 2009.

Big Banks and Investors were only allowed to participate in the carry trade. Ordinary citizens were once again shut out, subjected to reduced credit, loss of jobs and homes, while the banks celebrated record profits (which would have been billions of losses had the loss reserve levels not been drastically reduced and Mark-to-Market accounting suspended). The profits were merely accounting gimmicks, not actual new sales and cash flow.

This year in Europe, we're seeing many of the Euro nations true subprime-ness, and a $1 trillion bailout 3 weeks ago, which was done to protect European banks from suffering losses on loans and bonds of sovereigns. Investors have seen this before and pushed bond prices lower in Europe. Nobody bought it. Tarp 2.0 Euro-style. "Fool me once. Shame on me. Fool me twice. Shame on you."

The US and US Dollar now look good. But for how long? Is it just the best of the worst? When does the Dollar carry trade turn? When do bond yields start rising in the US, suggesting diminishing confidence in the US to repay it's debt? Does it drop when the carry trade really starts accelerating? Will it be like when people tried selling Subprime MBS and couldn't find a buyer, unless they were willing to take $0.20/$1.00?

It's coming, and with that run on the US Dollar and US bonds, will be a run on incumbent Democrats and Republicans, including the current False Hope President. Both parties supported Wall Street over individual citizens. They've defended the corporataucracy over the people. They've allowed the pilfering and plundering done throughout the world (Iraq, Afghanistan the most recent) to be done on our own soil. It has happened before our eyes and most people aren't even aware of it.

All it takes is the run on the dollar pretty soon. Probably early next year. People will finally wake up. It will be impossible not to notice, despite the best efforts by The Fed to prop things up, to no avail. Somebody like Ron Paul has a realistic shot at winning the election. He's been the one guy to continually challenge The Fed and the political establishment for years. By 2012, enough stuff will hit the fan that it'll be impossible to sweep under the rug the financial state of the country, as reflected in the stagnant 10-20% unemployment, even after $6-10 trillion in stimulus money thrown down the drain.

Trivial issues like abortion, prescription drugs for senior citizens, and boxers/briefs won't distract people from the real issues in this upcoming election. Time for a new leader to emerge outside the mold of the failing two party establishment.